Glenbrook Capital Management Issues Letter to San Juan Royalty Trust Officer Requesting Explanation and Transparency Around Expenses, Capital Expenditures and the Trust's Financial Position

Rhea-AI Summary

Glenbrook Capital Management, holder of 724,480 units of San Juan Basin Royalty Trust (TRC), has sent a detailed letter to trustee Argent Trust Company seeking greater transparency on expenses, capital expenditures and the Trust’s liquidity and credit facility position.

Glenbrook requests a granular breakdown of general and administrative expenses and an explanation for an approximate $976,000 year-over-year decline. It asks for fuller disclosure of a 2017–2020 joint interest audit that produced a prior-period adjustment of about $3.47 million, roughly $2.60 million net negative to the Trust. The letter also seeks clarity on Hilcorp’s capital spending decisions, Argent’s plans around the drawn $2.0 million credit facility maturing May 21, 2027, and the restoration of monthly newswire press releases, and states Glenbrook may participate in a future financing alongside other unitholders.

Positive

• Large unitholder engagement: Glenbrook, with 724,480 units, offers to participate in potential financing alongside other unitholders.
• Requested G&A transparency: Call for detailed breakdowns could improve cost visibility for investors.

Negative

• Prior-period audit adjustment: About $3.47 million, roughly $2.60 million net negative to the Trust.
• G&A volatility: Approximate $976,000 year-over-year decrease in general and administrative expenses requires explanation.
• Credit facility reliance: Drawn $2.0 million Texas Bank facility maturing May 21, 2027 raises liquidity planning questions.
• Suspended distributions and excess costs: Accumulated excess production cost balance must be cleared before distributions resume.

News Explained

The September 10, 2026 release records Glenbrook's request for information from Argent, rather than a Trust-approved financing or change to unitholder ownership; Argent is asked to respond within ten business days.

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MINDEN, Nev., Sept. 10, 2026 /PRNewswire/ -- Glenbrook Capital Management, a unitholder of San Juan Royalty Trust (NYSE: TRC) ("SJT" or the "Trust") representing more than 724,000 units of SJT, today issued the following letter to SJT's Trust Officer, Argent Trust Company, calling on them to enhance unitholder communication and provide adequate transparency around the Trust's expenses, capital expenditures and financial position in regards to its liquidity and outstanding credit facility. 

September 10, 2026

Argent Trust Company
Attn: San Juan Basin Royalty Trust Officer
3838 Oak Lawn Avenue, Suite 1720
Dallas, TX 75219

To the Trust Officer:

As the holder of 724,480 units of San Juan Basin Royalty Trust ("SJT" or the "Trust"), Glenbrook Capital Management, Inc. ("Glenbrook") writes to raise several matters that we believe require a substantive response from Argent Trust Company ("Argent") to unitholders.

The impetus for this letter was our recent telephone conversation with Glynnis Elo and Nancy Willis of Argent. That discussion reinforced our view that unitholders need considerably more information about the Trust's financial position, material operational developments and the measures being taken to protect their interests.

We recognize that Argent operates under the Trust Indenture, that Argent inherited a number of the issues discussed below, and that Hilcorp controls many operating decisions. Glenbrook is focused on how Argent is exercising the rights and responsibilities it does have under the Trust documents. Our purpose in writing is to identify those areas in which the Trustee can, and in our view should, act.

The suspension of distributions, the accumulated excess production cost balance, recent capital expenditures and the Trust's reliance on its credit facility are each serious matters. In these circumstances more communication and transparency are required, not less. We ask Argent to address the following matters directly, publicly and in detail.

Expense Disclosure

SJT unitholders need a clear understanding of the Trust's administrative expenditures. The Trust's current disclosures are considerably less detailed than what Argent reports for two other trusts it administers.

In recent reporting, Permian Basin Royalty Trust ("PBT") divided general and administrative expenses into four categories: trustee fees, professional fees, unitholder service fees and other expenses. Sabine Royalty Trust ("SBR") included a separately audited Special Purpose Statement of Fees and Expenses Paid by Sabine Royalty Trust to Argent identifying trustee fees, escrow-agent fees and a bonus fee. Elsewhere in its most recent annual filing, SBR also quantified year-over-year changes in additional expense categories, including legal and professional fees, check stub data exchange (CDEX) services, courier expenses and postage. We see no reason SJT unitholders should receive less.

We therefore request that Argent provide a breakdown of the Trust's general and administrative expenses, including:

• trustee fees;
• legal and professional fees;
• accounting and audit fees;
• unitholder servicing costs;
• investor communication costs;
• trustee-transition expenses; and
• other material general and administrative items,

in each case identifying amounts paid to Argent or its affiliates. We also request an explanation of the approximately $976,000 year-over-year decrease in general and administrative expenses, including the contribution of transition expenses, timing differences and other material components.

Trustee-related costs must remain proportionate to the Trust's circumstances. Greater disclosure will allow unitholders to understand those costs and to evaluate the steps being taken to control them.

2017–2020 Joint Interest Audit Adjustment

Unitholders need more information about the joint interest audit covering the 2017 through 2020 periods and the resulting prior-period adjustment of approximately $3.47 million, approximately $2.60 million of which was net negative to the Trust. We recognize that the audit period predates Argent's appointment. The adjustment, however, was recorded during Argent's tenure and has materially contributed to the Trust's present financial position. Argent's predecessor PNC was aggressive with Hilcorp and corrected mistakes made by them resulting in a positive outcome for SJT - in stark contrast to the approach of Argent. In September 2023 PNC, after extensive discussions with Hilcorp, got a payment of $1,037,093 from Hilcorp which included interest on the underpayment.

Please describe the review Argent undertook, including:

1. when Argent first learned that a material adjustment might result from the audit;
2. when Argent learned the amount of the adjustment;
3. who independently reviewed the calculation and the underlying audit on the Trust's behalf;
4. whether PNC Bank, as predecessor trustee, was consulted and what position it took;
5. whether Argent considered challenging or disputing the adjustment, and the basis for its decision; and
6. whether Argent investigated any reimbursement, indemnification or other recovery rights against PNC, Hilcorp or any other party.

If Argent concluded that no viable avenue of recovery existed, please explain why.

Hilcorp Capital Expenditures

The economics of Hilcorp's recent capital program are difficult to reconcile with the prevailing natural gas price environment and the Trust's existing excess production cost balance. We understand that five vertical wells have been removed from the 2026 plan and that completion reporting for the remaining six horizontal wells has been deferred to the first quarter of 2027.

Please identify exactly what information, audit, consultation, objection or other rights Argent has under the Trust documents and the governing agreements with respect to Hilcorp's capital expenditures, including under the Prudent Operator standard, and which of those rights Argent has actually exercised. Given current natural gas prices, the accumulated excess production cost balance and the suspension of distributions, has Argent independently evaluated the economic rationale for these expenditures and their expected benefit to the Trust? Has Argent raised concerns with Hilcorp and, if so, what response did it receive? If any such correspondence exists, is it available to unitholders?

Credit Facility and May 2027 Maturity

The Trust's liquidity position is an immediate concern. Argent has drawn on the Trust's $2.0 million Texas Bank credit facility, which is scheduled to mature on May 21, 2027, and the accumulated excess production cost balance creates a substantial hurdle before distributions can resume.

Please describe Argent's liquidity plan through and beyond the May 21, 2027 maturity, including:

• the current amount drawn and remaining availability under the facility;
• the status of any extension, renewal or replacement discussions with the lender;
• alternative financing sources under consideration, including any offering to unitholders; and
• Argent's contingency plan if the facility cannot be renewed on acceptable terms.

Glenbrook would consider participating, alongside other unitholders, in a financing if Argent presents a viable plan.

Where Argent believes any requested action is outside its authority under the Trust documents, please identify the applicable limitation and describe what rights or alternatives remain available to the Trustee.

Restoration of National Newswire Distribution of Monthly Press Releases

Argent should reinstate this distribution of monthly press releases. Before Argent's appointment, these monthly releases were the most effective means of reaching unitholders, prospective investors, analysts, financial media and other market participants, and they increased the Trust's visibility and accessibility. They are especially needed now, while distributions are suspended and unitholder interest is understandably elevated.

Glenbrook has obtained a quote from a reputable national newswire service for twelve U.S. national press releases annually, with unlimited word count, at a total annual cost of $7,200. We believe this is a modest expense for maintaining consistent, direct communication with unitholders and the market. If Argent will not restore the distribution of the monthly releases, please identify what alternative communication mechanism it proposes to provide comparable regular information to unitholders and the market.

We request a written response within ten business days of the date of this letter, and we would welcome a call with Argent thereafter to discuss these matters. Glenbrook remains prepared to engage constructively with Argent, Hilcorp and fellow unitholders on practical measures to strengthen the Trust's financial position, transparency and long-term prospects.

Sincerely,

Grover T. Wickersham
Chief Executive Officer
Glenbrook Capital Management, Inc.

Media Contact:
ASC Advisors
Taylor Ingraham / Cassandra Dasco
Partner, ASC Advisors
tingraham@ascadvisors.com / cdasco@ascadvisors.com
203-992-1230

Investor Contact:
Grover Wickersham
CEO, Glenbrook Capital Management

Richard Rudgley
richard@glenbrookcapital.net
650-441-9525

Disclaimer and Cautionary Statement Regarding Forward-Looking Statements
This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein in any state to any person.

The information herein contains "forward-looking statements." Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "potential," "targets," "forecasts," "seeks," "could," "should" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct or that any of the objectives, plans or goals stated herein will ultimately be undertaken or achieved. If one or more of such risks or uncertainties materialize, or if Glenbrook underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Glenbrook that the future plans, estimates or expectations contemplated will ever be achieved.

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SOURCE Glenbrook Capital Management

FAQ

What specific expense disclosures is Glenbrook requesting from Argent?

Glenbrook asks Argent to itemize general and administrative expenses into categories such as trustee fees, legal and professional fees, accounting and audit fees, unitholder servicing and investor communication costs, trustee-transition expenses, and other material items, and to identify amounts paid to Argent or its affiliates. It also seeks an explanation of the approximate $976,000 year-over-year decrease in these expenses, including the roles of transition expenses, timing differences and other components.

What additional information does Glenbrook seek about the 2017–2020 joint interest audit adjustment?

Glenbrook requests details on when Argent first learned a material adjustment might result, when the amount was known, who independently reviewed the calculation and audit on the Trust’s behalf, whether predecessor trustee PNC was consulted, whether Argent considered challenging the adjustment, and whether Argent explored reimbursement, indemnification or recovery rights against PNC, Hilcorp or others, along with the reasons if no recovery path was pursued.

What does Glenbrook want regarding Hilcorp’s capital expenditures?

Glenbrook asks Argent to spell out its information, audit, consultation, objection and other rights under the Trust documents and agreements relating to Hilcorp’s capital program, identify which rights have been exercised, and state whether Argent has independently evaluated the economics of recent and planned capital spending given natural gas prices, the excess production cost balance and suspended distributions. It also asks if Argent has raised concerns with Hilcorp and whether any related correspondence can be made available to unitholders.

What information is requested about the Trust’s credit facility and liquidity plan?

Glenbrook asks Argent to describe the current amount drawn and remaining availability on the $2.0 million Texas Bank facility maturing May 21, 2027, the status of any extension, renewal or replacement discussions, alternative financing options under consideration (including any offering to unitholders), and contingency plans if the facility cannot be renewed on acceptable terms.

What change in investor communications does Glenbrook propose?

Glenbrook urges Argent to restore monthly press releases via a national newswire, noting these were used before Argent’s appointment and citing a quote of $7,200 annually for twelve U.S. national releases with unlimited word count. If Argent does not reinstate this, Glenbrook asks it to identify an alternative mechanism that would provide comparable regular information to unitholders and the market.