San Juan Basin Royalty Trust Announces March Cash Distribution
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Insights
The monthly cash distribution announced by the San Juan Basin Royalty Trust represents a tangible return on investment for unit holders and the increase in the average gas price from December 2023 to January 2024 is a positive indicator for the energy sector. The decision by Hilcorp to revise its 2024 capital project plan, particularly the removal of a costly vertical drill well, suggests a strategic shift that could impact future distributions. Investors might view this as a prudent move to manage expenses, potentially leading to a more stable trust performance. The increased cash reserve is a conservative approach to financial management, indicating the Trustee's focus on mitigating risks associated with revenue volatility in the commodity market.
From a market perspective, the reported figures provide insights into the operational efficiency of Hilcorp and the Trust's ability to generate revenue despite fluctuating production costs. The Trust's decision to increase cash reserves may be interpreted as a response to market uncertainties, which could reassure investors about the Trust's preparedness for potential downturns. Additionally, the Trust's ongoing comprehensive audit process is an essential aspect that underlines the importance of transparency and compliance in fostering investor confidence.
Looking at the broader energy policy landscape, the distribution by the San Juan Basin Royalty Trust is reflective of the current state of energy markets, including the effects of regulatory changes and market dynamics on production and pricing. The revised capital expenditures and the Trustee's proactive management of cash reserves also indicate an adaptive strategy to the evolving energy policy environment. This could have long-term implications for the Trust's operations and potentially influence investor decisions based on the anticipated regulatory trajectory.
For the production month of January 2024, the owner of the Subject Interests, Hilcorp San Juan L.P. and the operator of the Subject Interests, Hilcorp Energy Company (collectively, "Hilcorp"), reported to the Trust net profits of
Hilcorp reported
Based upon information provided to the Trust by Hilcorp, gas volumes for the subject interests for January 2024 totaled 1,808,545 Mcf (2,009,495 MMBtu), as compared to 1,909,007 Mcf (2,121,119 MMBtu) for December 2023. Dividing gas revenues by production volume yielded an average gas price for January 2024 of
Hilcorp previously provided the Trust with its 2024 capital project plan for the Subject Interests (the "2024 Plan"), which estimated 2024 capital expenditures for the Subject Interests to be
Pursuant to the Amended and Restated Royalty Trust Indenture, dated December 12, 2007 (as amended on February 15, 2024, by the First Amendment to the Amended and Restated Royalty Trust Indenture), the Trustee is authorized to retain, in its sole discretion, a cash reserve for payment of Trust liabilities that are contingent or uncertain or otherwise not currently due and payable. The Trustee previously maintained a cash reserve in the amount of
Production from the Subject Interests continues to be gathered, processed, and sold under market sensitive and customary agreements, as recommended for approval by the Trust's Consultant. The Trustee continues to engage with Hilcorp regarding its ongoing accounting and reporting to the Trust, and the Trust's third-party compliance auditors continue to audit payments made by Hilcorp to the Trust, inclusive of sales revenues, production costs, capital expenditures, adjustments, actualizations, and recoupments. The Trust's auditing process has also included detailed analysis of Hilcorp's pricing and rates charged. As previously disclosed in the Trust's filings, these revenues and costs (along with all costs) are the subject of the Trust's ongoing comprehensive audit process by our professional consultants and outside counsel to ensure full compliance with all the underlying operative Trust agreements and evaluating all available potential remedies in the event there is evidence of non-compliance.
Forward Looking Statements. 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.
Contact: | San Juan Basin Royalty Trust |
Argent Trust Company, Trustee | |
Nancy Willis, Director of Royalty Trust Services | |
Toll-free: (855) 588-7839 or (866) 809-4553 | |
Fax: (214) 559-7010 | |
Website: www.sjbrt.com | |
Email: royaltytrustgroup@argenttrust.com |
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SOURCE San Juan Basin Royalty Trust
FAQ
What is the monthly cash distribution declared by Argent Trust Company for San Juan Basin Royalty Trust (SJT) for January 2024?
Who reported net profits from the Subject Interests to the Trust for January 2024?
What were the total gas volumes reported by Hilcorp for the Subject Interests in January 2024?
What was the average gas price for January 2024?
How much did Hilcorp revise its 2024 capital project plan by?
