San Juan Basin Royalty Trust Announces Monthly Reporting Status Update and Receipt of Underpayment for Prior Reporting Months
November 15 2021 - 2:35PM
Business Wire
PNC Bank, National Association, as the Trustee of the San Juan
Basin Royalty Trust (the “Trust”) (NYSE:SJT), today announced a
status update regarding the monthly reporting by the owner of the
Trust’s subject interests, Hilcorp San Juan, L.P. (“Hilcorp”).
On November 11, 2021, Hilcorp met with the Trust (the “November
2021 Meeting”) to discuss several material issues that the Trust
had raised with respect to Hilcorp’s estimates of gross proceeds
and severance taxes, as well as the Trusts’ audit of Hilcorp’s
reported revenue and expenses. During the November 2021 Meeting,
Hilcorp informed the Trust that it had completed its actualization
and validation of January, February, and March 2021 with respect to
the gross proceeds and severance tax estimates attributable to the
Royalty Interests owned by the Trust. Based on such review, Hilcorp
informed the Trust that it had determined that it owes the Trust an
additional $448,780 for these time periods, along with $63,496 in
interest in accordance with the terms of the Conveyance.
Also, during the November 2021 Meeting, Hilcorp informed the
Trust that it had discovered errors made in the setup of a few of
its general ledger accounts during its SAP conversion process.
Specifically, Hilcorp stated that these accounts had been
mislabeled as billable, including three of the Trust’s general
ledger accounts. As a result, Hilcorp notified the Trust that it
will reimburse the Trust $2,681,521 for the erroneous billed labels
for the January through July 2021 production months, along with
$72,667 in interest in accordance with the Conveyance. Hilcorp
believes that it has now corrected its accounting internal control
systems.
Hilcorp intends to include the payments for these actualizations
and adjustments, together with the related interest, in the
November reporting and distribution to the Trust. Hilcorp also
confirmed that it continues to work on its actualization and
accounting of the operated revenue and severance tax computations
for the production month of April 2021 and will notify the Trust
promptly upon completion of such actualization and accounting.
The Trustee continues to engage with Hilcorp regarding its
ongoing accounting and reporting to the Trust, and the Trust’s
third-party compliance auditors continue to audit all payments made
by Hilcorp to the Trust, including adjustments, true-ups, and
recoupments. The Trustee continues to consult with outside counsel
to review the rights of the Trust with respect to these matters and
to evaluate any available potential legal remedies.
Contact: San Juan Basin Royalty Trust PNC Bank, NA PNC Asset
Management Group 2200 Post Oak Blvd., Floor 18 Houston, TX 77056
website: www.sjbrt.com e-mail: SJT@pnc.com
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,” “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/20211115006175/en/
James R. Wilharm, Senior Vice President and Director of Trust
Real Estate Services Kaye Wilke, Investor Relations, toll-free:
(866) 809-4553
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