SAN JUAN BASIN ROYALTY TRUST 8K

San Juan Basin Royalty Trust reported that due to ongoing excess production costs, low gas prices, and debt/ reserve requirements, it will pay no July 2026 cash distribution and will not resume distributions until these obligations are fully satisfied.

San Juan Basin Royalty Trust, through its trustee Argent Trust Company, announced that it will not declare a July 2026 cash distribution to unitholders because cumulative excess production costs tied to prior-period spending on the royalty-bearing interests and persistently low natural gas prices continue to exceed gross proceeds, leaving the Trust with a deficit of approximately $9.6 million gross ($7.2 million net). Hilcorp will keep charging this excess cost balance against the Trust’s net proceeds each month, so no royalty income will flow to the Trust—and thus no distributions will be made—until (i) the excess production cost balance from Hilcorp San Juan L.P.’s 2024 drilling of two new horizontal wells is fully repaid, (ii) a $2 million reserve is replenished, and (iii) principal and interest on the Trust’s Texas Bank line of credit are paid; in the meantime, the Trust is relying on its line of credit to fund administrative expenses, has minimal cash reserves, has been informed by Hilcorp of the removal of five planned 2026 vertical wells from its development plan, and continues an intensive audit and review of Hilcorp’s reported revenues, costs, pricing, and compliance with underlying agreements.

Filing Facts

CIK

319655

Ticker

-

Form

8K

Source Type

sec

Accession

0001193125-26-310097

Alert Tier

7