Compass Bank, as Trustee of the San Juan Basin Royalty Trust (the
“Trust”) (NYSE:SJT), today reported that Hilcorp San Juan L.P.
(“Hilcorp”), has provided the Trust with an update to its previously
reported 2019 Capital Expenditures Plan (the “Revised Plan”).
Hilcorp’s original 2019 capital expenditures plan (the “Original Plan”),
announced by the Trust on March 1, 2019, estimated Hilcorp's capital
expenditures to be $2,653,000 for the Trust’s subject interests. Of this
amount, the Original Plan allocated approximately $728,000 towards five
well recompletions and an additional $1,925,000 towards one horizontal
well to be drilled in the Mancos formation (Trieb Federal Com 601 #1H).
The Revised Plan increases Hilcorp's estimated 2019 capital expenditures
to approximately $12.6 million for the subject interests and therefore,
may cause future distributions to be lower. This amount increases the
total well recompletions scheduled to be completed to seventeen,
primarily in the Mesaverde formation, and projects completing one
horizontal well in the Mancos formation and one horizontal well in the
Fruitland Coal formation. The Revised Plan allocates approximately $3.7
million towards the well recompletions and approximately $8.9 million
towards the drilling of the horizontal wells.
Included within the Revised Plan is an increase in the estimated cost of
the Trieb Federal Com 601 #1H horizontal well from approximately $1.9
million to approximately $7.7 million. Hilcorp has informed the Trust
that the revisions are due to the inadvertent omission by Hilcorp to
include the total project cost in the Original Plan. The estimated
capital expenditures to the subject interests for the Fruitland Coal
horizontal well (Trail Canyon 104H) are approximately $1.2 million.
Hilcorp will be the operator of all the projects included in the Revised
Plan, and has further informed the Trust that its planned project status
for 2019 is fluid and that additional projects may be added. Due to this
fluidity, Hilcorp has advised the Trust that actual capital costs may
vary from these estimates.
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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