PNC Bank, National Association, as the successor trustee (the
“Trustee”) of the San Juan Basin Royalty Trust (the “Trust”) (NYSE:
SJT), today declared a monthly cash distribution to the holders of
its Units of beneficial interest (the “Unit Holders”) of
$6,982,507.89 or $0.149811 per Unit, based primarily upon the
reported production during the month of September 2021 and
nonrecurring reimbursements to the Trust from prior month
actualizations and adjustments, plus interest. The distribution is
payable December 14, 2021, to Unit Holders of record as of November
30, 2021.
For the production month of September 2021, the operator of the
Trust’s subject interests, Hilcorp San Juan L.P. (“Hilcorp”),
reported to the Trust net profits of $9,520,577 ($7,140,432 net
royalty amount to the Trust).
Hilcorp reported $7,603,853 of revenue for the production month
of September 2021. This includes September revenues of $7,779,357
and revenue actualizations for the January, February, March, and
April 2021 production months which decreased revenues by $668,950.
The reporting month of September 2021 also includes other revenues
of $493,446 which includes $203,196 in nonrecurring additional
revenue related to granted audit exceptions and interest, an
estimate of $100,000 for non-operated income, and $190,250 of
interest due to the Trust from prior actualizations and
adjustments.
Hilcorp reported a credit of $1,916,724 of production costs for
the production month of September 2021. This includes September
production costs of $3,140,651, which is made up of $2,057,967 of
lease operating expense, $1,078,450 of severance taxes and $4,234
of capital costs. Production costs also include credits of
$1,482,014 for the severance tax actualizations for the January,
February, March, and April 2021 production months, as well as
credits of $3,575,361 for nonrecurring corrections of January
through July 2021 lease operating expenses. 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. Hilcorp believes that it has now corrected its
accounting internal control systems.
Based upon information Hilcorp provided to the Trust, gas
volumes for the subject interests for September 2021 totaled
167,812 Mcf (186,458 MMBtu), including a credit for actualized
volumes of 1,952,591 Mcf (2,169,545 MMBtu) due to the actualization
of January through April 2021 revenues. For the production month of
September 2021, excluding actualizations, gas production for the
subject interests totaled 2,120,403 Mcf (2,356,003 MMBtu), as
compared to 2,171,709 Mcf (2,413,010 MMBtu) for August 2021.
Dividing revenues by production volume, excluding actualizations,
yielded an average gas price for September 2021 of $3.60 per Mcf
($3.24 per MMBtu), as compared to an average gas price for August
2021 of $3.37 per Mcf ($3.04 per MMBtu).
Hilcorp has informed the Trust that it has completed the
implementation of its new accounting system. Hilcorp began
reporting actual, instead of estimated, production for the June
2021 production month (August 2021 Trust reporting month) and it
will report actual production going forward. The remaining months
of non-operated revenue and non-operated severance tax
actualizations for prior periods will be accounted for and reported
in future distribution reports. At this time, the amount of these
actualizations is unknown. The Trustee will coordinate with Hilcorp
on the timing of any further actualizations and will communicate
that timing to Unit Holders.
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, actualizations, 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, National Association
PNC Asset Management Group
2200 Post Oak Blvd., Floor 18
Houston, TX 77056
website: www.sjbrt.com
e-mail: sjt@pnc.com
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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version on businesswire.com: https://www.businesswire.com/news/home/20211119005235/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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