San Juan Basin Royalty Trust Reports No Monthly Cash Distribution due to Excess Production Costs

Strategic Insights -

San Juan Basin Royalty Trust, a Delaware statutory trust, has announced that it will not declare a monthly cash distribution to its Unit Holders due to excess production costs for its subject interests during the production month of July 2024. The excess production costs are primarily due to significant lease operating expenses and capital expenditures associated with Hilcorp's 2024 capital project plan. Hilcorp reported $3,905,235 of total revenue from the subject interests for the production month of July 2024, but production costs exceeded gross proceeds, resulting in excess production costs of approximately $11,517,368 gross ($8,638,026 net to the Trust).

Key Takeaways:

  • The San Juan Basin Royalty Trust will not declare a monthly cash distribution to its Unit Holders due to excess production costs of approximately $11,517,368 gross ($8,638,026 net to the Trust) for the subject interests during the production month of July 2024.
  • Hilcorp reported $3,905,235 of total revenue from the subject interests for the production month of July 2024, consisting of $3,670,009 of gas revenues and $235,226 of oil revenues.
  • The excess production costs are primarily due to significant lease operating expenses and capital expenditures associated with Hilcorp's 2024 capital project plan.
  • The Trust administrative expenses totaled $145,121, with interest income of $5,679 applied to cover a portion of this month's expenses.
  • The Trust plans to replenish its cash reserves and continue to increase them to $2.0 million.
  • Production from the subject interests continues to be gathered, processed, and sold under market-sensitive and customary agreements.

Statistics:

  • Total revenue from the subject interests for July 2024: $3,905,235.
  • Partial breakdown of revenue: Gas revenues: $3,670,009; Oil revenues: $235,226.
  • Production costs for the subject interests for July 2024: $6,966,097.
  • Excess production costs: $11,517,368 gross ($8,638,026 net to the Trust).
  • Trust administrative expenses: $145,121.
  • Interest income: $5,679.
  • Cash reserves as of April 30, 2024: $1.8 million.
  • Current cash reserves: $1,099,699.

Sources:

  • San Juan Basin Royalty Trust
  • Hilcorp San Juan L.P.