San Juan Basin Royalty Trust Announces Hilcorp’s Updates on Capital Expenditures Plan
October 10 2019 - 9:00AM
Business Wire
BBVA USA, as Trustee of the San Juan Basin Royalty Trust (the
“Trust”) (NYSE:SJT), today reported that Hilcorp San Juan L.P.
(“Hilcorp”), the operator of the Trust's subject interests (the
"Interests"), has provided the Trust with updates and comments to
its previously reported 2019 Capital Expenditures Plan for the
Interests, which Hilcorp previously revised in May 2019 (as revised
in May 2019, the “Capital Plan”).
Recently, the Trust and its compliance auditors met with senior
representatives from Hilcorp to discuss the status of the Capital
Plan. Based on that discussion and additional information provided
by Hilcorp, the Trust is reporting the following update to the
Capital Plan:
2019 Capital Expenditures
Plan
(all amounts Net Pre-Trust
Cost)
(in millions)
2019 Original / Previously
Reported* [Forecast]
Through July 2019 (Trust
September 2019)
[Actual]
Revised 2019
[Forecast]
$12.6
$7.4
$8.0
__________
* As updated by Hilcorp and reported by
the Trust on May 9, 2019
Hilcorp has informed the Trust that an environmental lawsuit
filed against the Bureau of Land Management (BLM) has stalled all
of the BLM’s permitting processes, including those permits
applicable to the Interests. As a result, Hilcorp is uncertain when
it will receive the required permits to allow it to conduct
additional capital expenditure drilling in the Interests. In
addition, Hilcorp informed the Trust that actual capital
expenditures and accruals for capital recompletions ran
approximately $0.7 million higher than previously forecasted based
upon additional recompletions performed in the Interests. Hilcorp
has revised its 2019 Capital Plan lower to total approximately $8.0
million. The Trust will resume distributions to its unit holders
once there is sufficient net proceeds to cover excess production
costs and replenish the Trust's cash reserves utilized to cover the
Trust's costs in lieu of net proceeds from the Interests. However,
we can provide no estimate as to the timing of the resumption of
distributions, or provide any assurances as to whether
distributions will continue or resume once Hilcorp's permitting
issues are resolved and drilling recommences.
Except for historical information contained in this news
release, the statements in this news release are forward-looking
statements that are made pursuant to the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements generally are accompanied by words such
as “estimates,” "believes," “anticipates,” “could,” “plan,” or
other words that convey the uncertainty of future events or
outcomes. Forward-looking statements and the business prospects of
San Juan Basin Royalty Trust are subject to a number of risks and
uncertainties that may cause actual results in future periods to
differ materially from the forward-looking statements. These risks
and uncertainties include, among other things, certain information
provided to the Trust by Hilcorp, volatility of oil and gas prices,
governmental regulation or action, litigation, and uncertainties
about estimates of reserves. These and other risks are described in
the Trust’s reports and other filings with the Securities and
Exchange Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20191010005082/en/
San Juan Basin Royalty Trust BBVA USA, Trustee 300 West Seventh
St., Suite B, Fort Worth, Texas 76102 website: www.sjbrt.com
e-mail: sjt.us@bbva.com
Joshua R. Peterson, Senior Vice President & Trust Officer
Kaye Wilke, Investor Relations, toll-free: (866) 809-4553
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