San Juan Basin Royalty Trust (NYSE: SJT) halts March 2026 distribution amid excess costs

Rhea-AI Filing Summary

San Juan Basin Royalty Trust reported that it will not declare a March 2026 cash distribution to unitholders. The decision stems from excess production costs on its subject interests and continued low natural gas prices. Cumulative excess production costs total about $6,186,819 gross ($4,640,115 net to the Trust), with all current net proceeds being applied to this deficit instead of royalties.

No distributions will resume until the Trust fully repays the excess production costs, replenishes a $2,000,000 reserve, and repays principal and interest on its line of credit. For January 2026, Hilcorp reported revenue of $6,352,562 and production costs of $4,301,489, but administrative expenses and deficit repayment still required additional borrowing, increasing the line of credit principal to $750,513.

Positive

• None.

Negative

• No March 2026 cash distribution and ongoing suspension of payouts until excess production costs, a $2,000,000 reserve, and line-of-credit obligations are fully satisfied, directly undermining the Trust’s income appeal.
• Cumulative excess production costs of about $6.2M gross ($4.64M net to the Trust) continue to absorb all net proceeds, preventing royalty income from reaching unitholders.
• Reliance on debt and shrinking reserves, with the Texas Bank line-of-credit principal at $750,513 and cash reserves reduced to $14,257, indicates constrained financial flexibility.

Insights

Income-focused energy securities analyst

Suspended distributions and rising obligations pressure this royalty trust’s income profile.

San Juan Basin Royalty Trust will pay no March 2026 cash distribution because excess production costs and weak gas prices are absorbing all net proceeds. Cumulative excess production costs are about $6.2M gross, and must be cleared before any royalty income reaches unitholders.

Distributions are further delayed until the Trust replenishes a $2M reserve and repays principal and interest on its Texas Bank line of credit. The principal balance on that facility is now $750,513, while cash reserves have declined to $14,257, highlighting limited liquidity.

Hilcorp’s 2026 capital plan for the subject interests totals about $14.0M across 32 projects focused on new drilling. These expenditures, especially completion costs expected in a later plan, could influence future net proceeds and the timing of any eventual resumption of distributions, depending on realized gas prices and project performance.

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 March 20, 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 March 20, 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 March due to excess production costs for the Trust’s subject interests (“Subject Interests”) during prior periods, 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 March 20, 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:	March 20, 2026	By:	/S/ NANCY WILLIS
			Nancy Willis Director of Royalty Trust Services

News Release

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

DALLAS, Texas, March 20, 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 $6,186,819 gross ($4,640,115 net to the Trust), a decrease in the deficit of $2,051,072 gross ($1,538,305 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 $6,352,562 of total revenue from the Subject Interests for the production month of January 2026, consisting of $6,220,448 of gas revenues, $132,114 of oil revenues.

For the Subject Interests, Hilcorp reported $4,301,489 of production costs (excluding the balance of excess production costs) for the production month of January 2026, consisting of $3,155,715 of lease operating expenses, $643,665 of severance taxes, and $502,110 of capital costs.

Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for January 2026 totaled 2,104,891 Mcf (2,338,767 MMBtu), as compared to 2,117,242 Mcf (2,352,491 MMBtu) for December 2025. Dividing gas revenues by production volume yielded an average gas price for January 2026 of $2.96 per Mcf ($2.66 per MMBtu), a decrease of $0.33 per Mcf ($0.30 per MMBtu) as compared to the average gas price for December 2025 of $3.29 per Mcf ($2.96 per MMBtu).

This month’s Trust administrative expenses totaled $187,019. 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 $53 and a draw of $183,665 from the Line of Credit will be used to pay the balance of Trust administrative expenses for the month of January which will bring the outstanding principal balance on the Line of Credit to $750,513.

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 February 2026. In March 2026, cash reserves in the amount of $3,301 will be utilized to pay interest on the Line of Credit, which will bring the balance of cash reserves maintained by the Trust to $14,257.

On February 18, 2026 Hilcorp provided the Trust with its capital project plan for the Subject Interests for calendar year 2026 (the “2026 Plan”). Under the 2026 Plan, Hilcorp estimates approximately $14.0 million in capital expenditures for 2026 across 32 projects. Of the total 2026 budget, about $11.5 million will be allocated to nine new vertical drill projects in the Mesaverde, Mancos, and Dakota formations and six new horizontal drill projects in the Mancos formation. Hilcorp subsequently informed the Trust that the 2026 Plan only includes budgeted expenses related to drilling costs for the six new horizontal wells; completion costs for the six new horizontal wells are expected to be included in Hilcorp’s capital

project plan for the Subject Interests for calendar year 2027, which will not be provided to the Trust until the first quarter of 2027.

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 March 2026 cash distribution?

San Juan Basin Royalty Trust is paying no March 2026 distribution because excess production costs and low natural gas prices are consuming all net proceeds. Until these excess costs and related obligations are fully repaid, no royalty income will be available for cash distributions to unitholders.

How large are the excess production costs affecting SJT distributions?

Cumulative excess production costs total approximately $6,186,819 gross, or $4,640,115 net to San Juan Basin Royalty Trust. All current net proceeds are being applied to this deficit, meaning the Trust does not receive royalty income until the excess costs balance is fully repaid.

What must happen before San Juan Basin Royalty Trust resumes cash distributions?

Before resuming distributions, San Juan Basin Royalty Trust must fully repay excess production costs, replenish a $2,000,000 reserve, and repay principal and interest on its Texas Bank line of credit. Only after these conditions are satisfied will royalty income again be distributed to unitholders.

What were January 2026 revenues and costs for SJT’s subject interests?

For January 2026, Hilcorp reported $6,352,562 of total revenue from the subject interests and $4,301,489 of production costs, excluding excess production costs. Despite positive net proceeds, these amounts are being applied to reduce the excess cost deficit rather than fund unitholder distributions.

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

After a January administrative expense draw, the Texas Bank line-of-credit principal stands at $750,513. Cash reserves will decline to $14,257 after paying March 2026 interest on the facility, leaving the Trust with limited reserve liquidity while distributions remain suspended.

What capital spending is planned on SJT’s subject interests for 2026?

Hilcorp’s 2026 capital project plan totals about $14.0 million across 32 projects on the subject interests. Roughly $11.5 million targets nine new vertical wells and six new horizontal wells, with completion costs for the horizontal wells expected in a separate 2027 capital plan.

Filing Exhibits & Attachments

1 document

Press Releases

• EX-99.1 EX-99.1 18.8 KB