San Juan Basin Royalty Trust (SJT, Financial) has announced that it will not distribute any monthly cash to its Unit holders. This decision comes as a result of the allocation of $3,435,269 in net proceeds, which would have otherwise been designated as royalty income, towards reducing the excess production costs. These costs have accumulated due to Hilcorp San Juan's development of two new horizontal wells planned for 2024.
The total outstanding balance of cumulative excess production costs stands at approximately $17,159,588 gross, with $12,869,691 net to the Trust. This reflects a reduction in the deficit by $4,580,359 gross, or $3,435,269 net to the Trust, since last month's report. Until this balance is settled entirely, the Trust will not receive any royalty income, as all net proceeds will continue to offset the excess production costs.
Additionally, the Trust has made it clear that no cash distributions will occur until future net proceeds are adequate enough to cover liabilities and reconstitute cash reserves. For the production month of February 2025, Hilcorp reported total revenues from the Subject Interests amounting to $7,869,451. This includes $7,685,519 in gas revenues and $183,932 in oil revenues. The production costs for this period totaled $3,289,092, comprising $2,628,926 in lease operating expenses, $278,026 in severance taxes, and $382,140 in capital expenditures.
