- San Juan Basin Royalty Trust (SJT, Financial) announces no cash distribution for April 2025 due to ongoing excess production costs.
- Gas production for February 2025 decreased by 15% month-over-month to 2,287,310 Mcf.
- The Trust's cash reserves fell to $117,797, with an aim to increase reserves to $2.0 million before resuming distributions.
The San Juan Basin Royalty Trust (SJT) has declared it will not make a cash distribution to its unit holders for April 2025. The decision is a result of continuing excess production costs from two horizontal wells drilled by Hilcorp in 2024. The Trust is obligated to apply the net proceeds of $3,435,269 towards the outstanding excess production costs balance, which currently stands at $12,869,691.
For February 2025, Hilcorp reported total revenues of $7,869,451 from the Trust's Subject Interests, with gas revenues contributing $7,685,519 and oil revenues adding $183,932. Production costs totaled $3,289,092. Gas production volumes fell to 2,287,310 Mcf, a 15% decline from January's volume of 2,689,216 Mcf, and the average gas price decreased to $3.36 per Mcf from the previous $3.74.
Currently, the Trust's cash reserves have dwindled to $117,797, impacted by administrative expenses totaling $142,466. The Trustee aims to replenish the cash reserves to $2.0 million prior to issuing future distributions and is exploring credit options to cover administrative expenses during this period of revenue shortfall.
The continued suspension of distributions significantly impacts unit holders who rely on these payouts, with the Trust's financial burden intensifying. Operational challenges persist as gas production volumes decrease and commodity prices weaken, complicating the path to resuming royalty distributions. The Trust's strategic plan includes engaging with Hilcorp to address accounting and reporting practices, which remain under audit by third-party consultants.
