BBVA USA (formerly known as Compass Bank), as Trustee of the San Juan
Basin Royalty Trust (the “Trust”) (NYSE:SJT), today reported that it
will not declare a monthly cash distribution to the holders of its Units
of beneficial interest (the “Unit Holders”) due to excess production
costs for the month of April 2019. Excess production costs occur when
production costs and capital expenditures exceed the gross proceeds for
a certain period. Excess production costs for this reporting period are
due primarily to capital spending associated with multiple well
recompletions along with lower natural gas prices. These well
recompletions were included in the revised 2019 capital expenditures
plan announced by the Trust on May 9, 2019.
Cash reserves will be utilized to pay Trust administrative expenses of
$84,943. Hilcorp San Juan L.P. (“Hilcorp”) will charge the excess
production costs of approximately $171,500 gross ($128,625 net) to the
next month’s distribution. No cash distributions will be distributed by
the Trust until future net proceeds are sufficient to pay then-current
Trust liabilities and replenish cash reserves.
Based upon information provided to the Trust by Hilcorp, gas production
for the subject interests totaled 2,271,800 Mcf (2,524,222 MMBtu) for
April 2019, as compared to 2,293,581 Mcf (2,548,423 MMBtu) for March
2019. Dividing revenues by production volume yielded an average gas
price for April 2019 of $1.37 per Mcf ($1.23 per MMBtu), as compared to
an average gas price for March 2019 of $2.00 per Mcf ($1.80 per MMBtu).
For the reporting month of April 2019, Hilcorp has advised the Trust
that revenue included an estimate of $169,000 for non-operated revenue.
For the month ended April 2019, Hilcorp reported to the Trust capital
costs of $1,155,677, lease operating expenses and property taxes of
$2,334,691 and severance taxes of $338,221.
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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