San Juan Basin Trust (SJT) halts May 2026 distribution amid excess costs

Rhea-AI Filing Summary

San Juan Basin Royalty Trust reported that it will not declare a monthly cash distribution for May 2026. Excess production costs from its royalty interests, combined with continued low natural gas prices, mean all current net proceeds are being used to cover past costs rather than pay unitholders.

Cumulative excess production costs total approximately $8.48 million gross ($6.36 million net to the Trust, up sharply from the prior month. For March 2026, revenue of about $2.81 million was outweighed by production costs of about $4.66 million, reinforcing the deficit. The Trust also continues to draw on a line of credit and use limited cash reserves to cover administrative expenses and interest.

No cash distributions will resume until future net proceeds fully repay excess production costs tied to new wells drilled in 2024, rebuild a $2 million reserve, and repay principal and interest on the Trust’s line of credit.

Insights

Energy income securities analyst

Trust halts May payout as costs and gas prices pressure cash flow.

San Juan Basin Royalty Trust is suspending its May 2026 cash distribution because past production costs and capital spending exceed revenue from its royalty interests. Cumulative excess production costs are about $8.48 million gross, or $6.36 million net to the Trust, and increased significantly from last month.

For March 2026, Hilcorp reported total revenue of $2.81 million from the Subject Interests versus production costs of $4.66 million, driven by lease operating expenses, severance taxes, and capital costs. The average gas price fell to $1.20 per Mcf, down $1.50 per Mcf from February, showing how pricing weakness constrains cash generation even as volumes rose.

The Trust is using a line of credit, now at about $895,689, and drawing down cash reserves, which are down to $3,891, to cover expenses and interest. Distributions will not resume until excess production costs are repaid, a $2 million reserve is rebuilt, and the line of credit is paid off, so unitholder income depends on future commodity prices and net proceeds trends.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Cumulative excess production costs (gross): $8,484,149 Cumulative excess production costs (net to Trust): $6,363,112 Increase in net excess costs vs prior month: $1,389,243 +5 more

8 metrics

Cumulative excess production costs (gross) $8,484,149 Balance of excess production costs as of latest reporting

Cumulative excess production costs (net to Trust) $6,363,112 Net deficit impacting Trust distributions

Increase in net excess costs vs prior month $1,389,243 Month-over-month increase in deficit net to the Trust

March 2026 total revenue $2,806,519 Revenue from Subject Interests for March 2026

March 2026 production costs $4,658,843 Production costs for Subject Interests, excluding excess cost balance

Average March 2026 gas price $1.20 per Mcf Average gas price for March 2026 production

Line of credit principal $895,689 Outstanding principal after May 2026 draw

Target reserve before distributions $2,000,000 Reserve that must be replenished before payouts resume

Key Terms

excess production costs, Subject Interests, line of credit, cash reserves, +1 more

5 terms

excess production costs financial

"Excess production costs occur when production costs and capital expenditures exceed the gross proceeds for a certain period."

Extra money a company spends when making more goods than needed, producing under inefficient conditions, or when materials and labor are wasted during manufacturing. Like baking too many cakes that go stale or using an expensive oven for a small batch, these costs raise the price of each item and tie up cash in unsold inventory. Investors care because higher excess production costs reduce profit margins, can signal poor planning, and may pressure future earnings and cash flow.

Subject Interests financial

"Hilcorp reported $2,806,519 of total revenue from the Subject Interests for the production month of March 2026"

line of credit financial

"a draw of $23,435 from the Line of Credit will be used to pay the balance of Trust administrative expenses"

A line of credit is a flexible borrowing arrangement that lets a company draw money up to a preset limit, repay it, and borrow again as needed—similar to a business credit card or an emergency tap on a savings account. It matters to investors because it shows how a firm manages short-term cash needs and growth funding without taking a single large loan; access, cost, and attached conditions can affect liquidity, interest expenses and financial risk.

cash reserves financial

"cash reserves in the amount of $5,476 will be utilized to pay interest on the Line of Credit"

lease operating expenses financial

"For the Subject Interests, Hilcorp reported $4,658,843 of production costs ... consisting of $2,960,974 of lease operating expenses"

Costs required to keep a leased property or asset running, including routine maintenance, repairs, utilities, insurance, property taxes and management fees that the lessee or lessor must pay while the lease is active. Investors care because these recurring outlays reduce net income and cash flow from the lease—like owning a rental where you still pay for upkeep—so they affect profitability, yield and the true return on an investment tied to leased assets.

Understanding 8-K Material Events →

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report May 18, 2026

SAN JUAN BASIN ROYALTY TRUST

(Exact name of Registrant as Specified in Its Charter)

Texas			001-08032	75-6279898
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
Argent Trust Company, Trustee 3838 Oak Lawn Ave. Suite 1720 Dallas, Texas 75219
(Address of Principal Executive Offices, including zip code)

Registrant’s Telephone Number, Including Area Code: (855) 588-7839

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Units		SJT		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On May 18, 2026, the San Juan Basin Royalty Trust (the "Trust") issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing that it would not declare a monthly cash distribution to the holders of its units of beneficial interest ("Units") for May due to excess production costs for the Trust’s subject interests (“Subject Interests”), as well as continued low natural gas pricing.

In accordance with general instruction B.2 to Form 8-K, the information in this Form 8-K shall be deemed “furnished” and not “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.		Description
99.1		Press Release dated May 18, 2026

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		By:	ARGENT TRUST COMPANY, AS TRUSTEE FOR THE SAN JUAN BASIN ROYALTY TRUST (Registrant)
Date:	May 18, 2026	By:	/S/ NANCY WILLIS
			Nancy Willis Director of Royalty Trust Services

News Release

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

DALLAS, Texas, May 18, 2026 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 $8,484,149 gross ($6,363,112 net to the Trust), an increase in the deficit of $1,852,324 gross ($1,389,243 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 $2,806,519 of total revenue from the Subject Interests for the production month of March 2026, consisting of $2,492,773 of gas revenues, $313,746 of oil revenues.

For the Subject Interests, Hilcorp reported $4,658,843 of production costs (excluding the balance of excess production costs) for the production month of March 2026, consisting of $2,960,974 of lease operating expenses, $372,569 of severance taxes, and $1,325,300 of capital costs.

Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for March 2026 totaled 2,077,611 Mcf (2,308,457 MMBtu), as compared to 1,891,801 Mcf (2,102,001 MMBtu), for February 2026. Dividing gas revenues by production volume yielded an average gas price for March 2026 of $1.20 per Mcf ($1.08 per MMBtu), a decrease of $1.50 per Mcf ($1.35 per MMBtu) as compared to the average gas price for February 2026 of $2.70 per Mcf ($2.43per MMBtu).

This month’s Trust administrative expenses totaled $28,959. The decrease 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 $48 and a draw of $23,435 from the Line of Credit will be used to pay the balance of Trust administrative expenses for the month of May which will bring the outstanding principal balance on the Line of Credit to $895,689.

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 April 2026. In May 2026, cash reserves in the amount of $5,476 will be utilized to pay interest on the Line of Credit, which will bring the balance of cash reserves maintained by the Trust to $3,891.

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 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 July 21, 2025, the Trust self-publishes monthly press releases on its website, www.sjbrt.com, and the release will not be included in any wire distribution. The self-publication is due to the depletion of the Trust’s cash reserves and conservation of the Line of Credit resources. 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

FAQ

Why is San Juan Basin Royalty Trust (SJT) paying no cash distribution for May 2026?

San Juan Basin Royalty Trust will pay no May 2026 distribution because excess production costs and continued low natural gas prices consume all net proceeds. Revenues from the Subject Interests are insufficient to cover accumulated production and capital costs plus Trust expenses.

How large are San Juan Basin Royalty Trust’s excess production costs as of March 2026?

Cumulative excess production costs total about $8,484,149 gross and $6,363,112 net to the Trust. This deficit increased by $1,852,324 gross and $1,389,243 net compared with the prior reporting period, further delaying potential resumption of cash distributions to unitholders.

What were San Juan Basin Royalty Trust’s March 2026 revenues and production costs?

For March 2026, Hilcorp reported total revenue of $2,806,519 from the Subject Interests, including $2,492,773 of gas and $313,746 of oil. Production costs were $4,658,843, comprising lease operating expenses, severance taxes, and capital costs, resulting in negative net proceeds for the period.

How did natural gas prices change for San Juan Basin Royalty Trust in March 2026?

The average gas price for March 2026 was $1.20 per Mcf, or $1.08 per MMBtu, for the Subject Interests. This represents a decrease of $1.50 per Mcf and $1.35 per MMBtu compared with February 2026, pressuring revenue despite higher production volumes.

When can San Juan Basin Royalty Trust resume cash distributions to unitholders?

Distributions will resume only after future net proceeds fully repay excess production costs, rebuild a $2,000,000 reserve, and repay principal and interest on the Trust’s line of credit. Until those conditions are met, all net proceeds are applied to obligations instead of unitholder payments.

What is the status of San Juan Basin Royalty Trust’s line of credit and cash reserves?

After a $23,435 draw in May, the Trust’s line of credit principal will be about $895,689. Cash reserves will be reduced to approximately $3,891 after paying interest on the line, indicating limited remaining reserve capacity for future Trust obligations and expenses.

Filing Exhibits & Attachments

1 document

Press Releases

• EX-99.1 EX-99.1 23.8 KB