San Juan Basin Royalty Trust Declares No Cash Distribution for September, Announces Capital Expenditures in Excess of Plan, &...
September 18 2018 - 2:58PM
Business Wire
Compass Bank, as 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”) based primarily upon excess capital
expenditures. Excess production costs occur when production costs
and capital expenditures exceed the gross proceeds for a certain
period. Excess production costs for this reporting month are due to
a significant increase in capital expenditures for well
recompletions, with the majority occurring in the San Juan 29-5
unit.
Cash reserves will be utilized to pay Trust administrative
expenses of $97,909. Hilcorp San Juan L.P. (“Hilcorp”) will charge
the excess production costs to the next month’s distribution. No
cash distributions will be distributed by the Trust until future
net proceeds are sufficient to pay then-current Trust liabilities
and replenish cash reserves.
Based upon information provided to the Trust by the present
owner of the Subject Interests (as defined in the Net Overriding
Royalty Conveyance), Hilcorp, gas production for the Subject
Interests totaled 3,038,035 Mcf (3,375,595 MMBtu) for July 2018, as
compared to 2,541,236 Mcf (2,823,595 MMBtu) for June 2018. Dividing
revenues by production volume yielded an average gas price for July
2018 of $1.77 per Mcf ($1.59 per MMBtu), as compared to an average
gas price for June 2018 of $1.84 per Mcf ($1.65 per MMBtu).
For the month ended July 2018, Hilcorp reported to the Trust
capital costs of $2,721,872, lease operating expenses and property
taxes of $2,287,676, and severance taxes of $910,070.
Capital Expenditures in Excess of
Plan
Hilcorp’s original 2018 capital expenditures plan delivered to
the Trust in February 2018 reported estimated capital expenditures
of $547,800 for the Subject Interests, which included two facility
projects and seven well recompletions. Hilcorp incurred increased
capital expenditures of $2,721,872 in the reporting month of July
2018. Hilcorp has informed the Trust that it has increased its
capital spending activity with the majority of this spending,
including the capital expenditures in the reporting month of July,
occurring in the second and third quarters of 2018.
Progress in Transition
Reporting
Hilcorp has advised the Trust that for the reporting month of
July 2018, oil production was actualized while gas revenues were
accrued based on actual production volumes, including an estimate
of $169,000 for non-operated revenue. In addition, Hilcorp has
advised the Trust that it has actualized gas volumes for the
October 2017 production month, which totaled a net decrease of
$92,000, but has not actualized the $1 million in other income
reported in October 2017.
Hilcorp has further advised the Trust that it intends to
actualize gas production for April, May and June 2018 and oil and
gas production for November 2017.
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version on businesswire.com: https://www.businesswire.com/news/home/20180918006035/en/
San Juan Basin Royalty TrustCompass Bank, TrusteeJoshua R.
Peterson, Vice President & Senior Trust OfficerKaye Wilke,
Investor Relations, toll-free:
866-809-4553sjt.us@bbva.comwww.sjbrt.com
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