San Juan Basin Royalty Trust Declares No Cash Distribution for August 2021
August 20 2021 - 9:00AM
Business Wire
BBVA USA, 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”) due to excess production costs for
the June 2021 production month. Excess production costs occur when
production costs exceed the gross proceeds for a certain
period.
For the production month of June 2021, the operator of the
Trust’s subject interests, Hilcorp San Juan L.P. (“Hilcorp”),
reported to the Trust profits of $1,850,948.35 gross ($1,388,211.26
net to the Trust), which was negatively offset by Hilcorp’s
true-ups and corrections of prior period true-ups causing excess
production costs.
More specifically, Hilcorp informed the Trust that the true-ups
that occurred last month to the lease operating and capital cost
categories for the January 2021 through April 2021 production
months resulting in additional profits were made in error. Based on
information provided by Hilcorp, the June 2021 reporting month
includes a reduction of $2,043,557.99 gross profits ($1,532,668.49
net to the Trust) due to corrections for those periods.
In addition, Hilcorp has informed the Trust that the June 2021
reporting month includes a reduction of $899,139.46 gross profits
($674,354.60 net to the Trust) based on true-ups to the revenue,
severance tax, and expense categories for the May 2021 production
month. As previously announced, Hilcorp is waiving interest on any
overpayments to the Trust in 2021.
Cash reserves will be utilized to pay Trust administrative
expenses of $150,148. Hilcorp will charge the excess production
costs of $1,091,749.10 gross ($818,811.83 net to the Trust) 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.
The Trustee will continue to communicate with Hilcorp regarding
these reporting issues and the Trust’s third-party compliance
auditors will continue to audit all payments made by Hilcorp to the
Trust, including adjustments, true-ups, and recoupments. In
addition, the Trustee is consulting with outside counsel to review
the rights of the Trust in respect of these ongoing reporting
issues and to evaluate any potential legal remedies that may be
available under the Conveyance.
Based upon information provided to the Trust by Hilcorp
(including true-ups), gas production for the subject interests
totaled 1,568,223 Mcf (1,742,470 MMBtu) for June 2021, as compared
to 2,695,014 Mcf (2,994,460 MMBtu) for May 2021. Dividing revenues
by production volume yielded an average gas price for June 2021 of
$3.46 per Mcf ($3.12 per MMBtu), as compared to an average gas
price for May 2021 of $1.88 per Mcf ($1.69 per MMBtu).
Hilcorp also reported that for the reporting month of June 2021,
revenue included an estimated $100,000 for non-operated revenue and
approximately $400,000 from the settlement of audit exceptions. For
the month ended June 2020, Hilcorp reported to the Trust (including
true-ups) capital costs of $29,335, lease operating expenses and
property taxes of $6,140,851, and severance taxes of
$1,048,749.
Contact:
San Juan Basin Royalty Trust
BBVA USA, Trustee
2200 Post Oak Blvd., Floor 18
Houston, TX 77056
website: www.sjbrt.com e-mail:
sjt.us@bbva.com
Joshua R. Peterson, Head of Trust Real
Assets & Mineral Resources
and Senior Vice President
Kaye Wilke, Investor Relations, toll-free:
(866) 809-4553
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210820005045/en/
Joshua R. Peterson, Head of Trust Real Assets & Mineral
Resources and Senior Vice President Kaye Wilke, Investor Relations,
toll-free: (866) 809-4553
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