San Juan Basin Royalty Trust Declares No Cash Distribution for October 2026

Future net proceeds must clear the accumulated deficit, replenish reserves and repay credit-line principal and interest before distributions resume.

Rhea-AI Summary

San Juan Basin Royalty Trust (SJT) will make no October 2026 cash distribution because of prior excess production costs and low natural gas prices. The cumulative deficit is approximately $9,317,264 net to the Trust, down $97,836 from last month's reporting period. All net proceeds will go toward that balance until it is repaid.

Distributions also require replenishing a $2,000,000 reserve and repaying line-of-credit principal and interest. August 2026 revenue from the subject interests was $4,868,781, against production costs of $4,738,333, excluding the accumulated deficit. Average gas prices rose to $2.28 per Mcf from $2.01 in July, while gas volumes increased to 2,057,618 Mcf from 2,046,556 Mcf. October administrative expenses totaled $80,118. A planned $80,101 credit-line draw will bring outstanding principal to $1,155,501; cash reserves remain unchanged at $3,891.

4 points · 0 major

MixediHow this balance works

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0 major · 5 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Minor pointCumulative excess production costs fell $97,836 net to the Trust from last month's reporting period.
• Minor pointAugust average gas prices increased $0.27 per Mcf to $2.28, compared with July 2026.
• Minor pointAugust gas volumes increased to 2,057,618 Mcf from 2,046,556 Mcf in July 2026.
• Minor point. Forward-looking: it has not happened yet and may not happen.The planned $80,101 credit-line draw will fund administrative expenses alongside $17 of interest income.

Negative

• Moderate point. Forward-looking: it has not happened yet and may not happen.No October 2026 cash distribution will be made because of prior excess production costs and low gas prices.
• Minor pointApproximately $9,317,264 net to the Trust in accumulated excess production costs must be repaid before royalty income resumes.
• Minor pointDistribution resumption also requires replenishing a $2,000,000 reserve and repaying credit-line principal and interest.
• Minor point. Forward-looking: it has not happened yet and may not happen.The planned credit-line draw will bring outstanding principal to $1,155,501.
• Minor pointOctober administrative expenses totaled $80,118, with the increase attributed to receipt and payment timing.

News Explained

The Trust says its comprehensive audit of Hilcorp’s reported revenues, costs, adjustments and recoupments remains ongoing, with consultants and outside counsel reviewing pricing and rates and assessing potential remedies if non-compliance is suspected.

Key Figures

Cumulative excess production costs: $12,423,018 gross ($9,317,264 net to the Trust) Decrease in excess-cost deficit: $130,448 gross ($97,836 net to the Trust) Required reserve: $2,000,000 +4 more

Cumulative excess production costs

$12,423,018 gross ($9,317,264 net to the Trust)

Current balance

Decrease in excess-cost deficit

$130,448 gross ($97,836 net to the Trust)

Change from last month's reporting period

Required reserve

$2,000,000

Must be replenished before distributions resume

Line of credit principal

$1,155,501

Outstanding after the October administrative-expense draw

Subject Interests revenue

$4,868,781

Production month of August 2026

Production costs

$4,738,333

Subject Interests, August 2026; excludes excess production costs

Average gas price

$2.28 per Mcf ($2.05 per MMBtu)

August 2026; reported increase from July 2026

AI-generated analysis. How Rhea-AI works. Not financial advice.

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DALLAS, Oct. 20, 2026 /PRNewswire/ -- Argent Trust Company, as the trustee (the "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 incurred during prior periods for the Trust's royalty interest burdening the subject interests ("Subject Interests"), as well as continued low natural gas pricing. Excess production costs occur when production costs and capital expenditures exceed the gross proceeds for a certain period. The balance of cumulative excess production costs is currently approximately $12,423,018 gross ($9,317,264 net to the Trust), a decrease in the deficit of $130,448 gross ($97,836 net to the Trust) from last month's reporting period.  Hilcorp will continue to charge the balance of excess production costs to the Trust's net proceeds each month. Until the balance is paid in full, the Trust will not receive royalty income as all net proceeds will be applied to the balance of excess production costs.  No cash distributions will be made by the Trust until future net proceeds are sufficient to (a) repay the balance of excess production costs, accrued as a result of Hilcorp San Juan L.P.'s drilling of two new horizontal wells in 2024, (b) replenish a reserve in the amount of $2,000,000, and (c) repay the principal and interest on the Trust's line of credit at Texas Bank ("Line of Credit"), after which time, the Trust will resume distributions of the royalty income to the holders of the Trust's units of beneficial interest. 

Hilcorp reported $4,868,781 of total revenue from the Subject Interests for the production month of August 2026, consisting of $4,688,244 of gas revenues, and $180,537 of oil revenues.

For the Subject Interests, Hilcorp reported $4,738,333 of production costs (excluding the balance of excess production costs) for the production month of August 2026, consisting of $2,899,702 of lease operating expenses, $317,045 of severance taxes, and $1,521,586 of capital costs.  

Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for August 2026 totaled 2,057,618 Mcf (2,286,242 MMBtu), as compared to 2,046,556 Mcf (2,273,951 MMBtu), for July 2026. Dividing gas revenues by production volume yielded an average gas price for August 2026 of $2.28 per Mcf ($2.05 per MMBtu), an increase of $0.27 per Mcf ($0.24 per MMBtu) as compared to the average gas price for July 2026 of $2.01 per Mcf ($1.81 per MMBtu).

This month's Trust administrative expenses totaled $80,118. The increase in administrative expenses was attributable to differences in timing of the receipt and payment of certain expenses by the Trust.  Interest income in the amount of $17 and a draw of $80,101 from the Line of Credit will be used to pay the balance of Trust administrative expenses for the month of October which will bring the outstanding principal balance on the Line of Credit to $1,155,501.

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. Cash reserves were utilized to pay interest accrued on the Line of Credit each month from July 2025 through May 2026.  The balance of cash reserves maintained by the Trust is unchanged from the prior month, and is currently $3,891.

Production from the Subject Interests continues to be gathered, processed, and sold under market sensitive and customary agreements.  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 the Trust's professional consultants and outside counsel to analyze compliance with all the underlying operative Trust agreements and evaluate potential remedies in the event there is suspected non-compliance.

As of October 20, 2026, the Trust will resume distributing monthly press releases via wire.  The Trust will continue to furnish unitholders with information through its website and Form 8-K filings with the Securities and Exchange Commission, which are available at www.sec.gov.  If anyone would like to receive the press release via email, please contact the Trustee to be placed on the monthly press release email list.

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

Fax: (214) 559-7010

Website: www.sjbrt.com 

Email: trustee@sjbrt.com 

View original content:https://www.prnewswire.com/news-releases/san-juan-basin-royalty-trust-declares-no-cash-distribution-for-october-2026-302913997.html

SOURCE San Juan Basin Royalty Trust

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

Why is San Juan Basin Royalty Trust paying no October 2026 distribution?

The Trust will make no October 2026 distribution because of accumulated excess production costs and continued low natural gas pricing. The excess-cost balance is approximately $12,423,018 gross, or $9,317,264 net to the Trust. All net proceeds will be applied to that balance until it is paid in full.

What must happen before SJT resumes cash distributions?

Future net proceeds must repay accumulated excess production costs, replenish a $2,000,000 reserve, and repay line-of-credit principal and interest before distributions resume. The accumulated costs arose from Hilcorp's drilling of two new horizontal wells in 2024. No date for resuming distributions is specified.

What were the August 2026 production costs for San Juan Basin Royalty Trust's subject interests?

August 2026 production costs totaled $4,738,333, excluding the accumulated excess-production-cost balance. They consisted of $2,899,702 in lease operating expenses, $317,045 in severance taxes and $1,521,586 in capital costs.