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  4. [8-K] SAN JUAN BASIN ROYALTY TRUST Reports Material Event

No June payout as San Juan Basin (NYSE: SJT) faces $9.3M deficit

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

San Juan Basin Royalty Trust will pay no cash distribution for June 2026. The trustee reports that excess production costs and continued low natural gas prices left the Trust with a cumulative excess production cost balance of about $9.26 million gross ($6.94 million net to the Trust).

For April 2026 production, Hilcorp reported revenue from the subject interests of $3.02 million against production costs of $3.80 million (excluding the excess cost balance), so costs exceeded revenues. The average gas price was $1.28 per Mcf, slightly higher than March but still low.

All net proceeds will continue to be applied to the excess cost balance. No distributions will resume until excess costs are repaid, a $2.0 million reserve is replenished, and the Trust’s line of credit—whose outstanding principal will be $944,470 after a new draw—is fully repaid.

Positive

  • None.

Negative

  • Monthly cash distributions suspended: The Trust will not pay a June 2026 distribution and will continue to apply all net proceeds to excess production costs, a $2.0 million reserve, and repayment of its line of credit before any future unitholder payouts resume.

Insights

Distributions are suspended until a sizeable cost deficit and debt are cleared.

San Juan Basin Royalty Trust is currently in a deficit position: cumulative excess production costs stand near $9.26 million gross, or $6.94 million net to the Trust. April 2026 production generated $3.02 million of revenue versus $3.80 million of costs, so operations did not cover expenses.

No royalty income will be available to unitholders until net proceeds first eliminate excess production costs tied to 2024 drilling, then rebuild a $2.0 million reserve and fully repay the Texas Bank line of credit, whose principal will be $944,470 after the latest draw. This structure channels cash toward balance-sheet repair before restoring income.

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.
Excess production costs (gross) $9,258,749 Cumulative balance, latest reporting
Excess production costs (net to Trust) $6,944,062 Cumulative balance, latest reporting
Increase in excess costs (net) $580,950 Change from prior month
April 2026 revenue $3,023,335 Total revenue from Subject Interests
April 2026 production costs $3,797,936 Production costs excluding excess costs
Average gas price $1.28 per Mcf April 2026, up from $1.20 per Mcf in March
Line of credit balance $944,470 Outstanding principal after June draw
Trust cash reserve $3,891 Balance of reserves maintained by the Trust
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.
line of credit financial
"a draw of $48,781 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.
MMBtu financial
"gas volumes for the Subject Interests for April 2026 totaled 2,065,583 Mcf (2,295,092 MMBtu)"
A MMBtu is a unit of energy equal to one million British thermal units, commonly used to measure natural gas and other fuel quantities for trading and contracts. For investors, it translates raw energy into a standardized price metric—think of it like gallons for gasoline—so changes in the MMBtu price affect producer revenues, utility costs, commodity derivatives, and the profitability of energy-related investments.
severance taxes financial
"Hilcorp reported $3,797,936 of production costs ... consisting of $2,940,273 of lease operating expenses, $341,260 of severance taxes"
Severance taxes are charges governments levy when natural resources like oil, gas, coal or minerals are extracted from the ground; think of it as a toll for taking nonrenewable materials out of a region. They matter to investors because they directly raise the cost of production, reduce project returns, and influence where companies choose to operate, while also providing a predictable revenue stream for local and state budgets that can affect broader economic conditions.
forward-looking statements regulatory
"the statements in this news release are forward-looking statements that are made pursuant to the Safe Harbor Provisions"
Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.
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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 June 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 June 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 June 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 June 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:

June 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 June 2026

DALLAS, Texas, June 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 $9,258,749 gross ($6,944,062 net to the Trust), an increase in the deficit of $774,601 gross ($580,950 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 $3,023,335 of total revenue from the Subject Interests for the production month of April 2026, consisting of $2,646,258 of gas revenues, $377,077 of oil revenues.

For the Subject Interests, Hilcorp reported $3,797,936 of production costs (excluding the balance of excess production costs) for the production month of April 2026, consisting of $2,940,273 of lease operating expenses, $341,260 of severance taxes, and $516,403 of capital costs.

Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for April 2026 totaled 2,065,583 Mcf (2,295,092 MMBtu), as compared to 2,077,611 Mcf (2,308,457 MMBtu), for March 2026. Dividing gas revenues by production volume yielded an average gas price for April 2026 of $1.28 per Mcf ($1.15 per MMBtu), an increase of $0.08 per Mcf ($0.07 per MMBtu) as compared to the average gas price for March 2026 of $1.20 per Mcf ($1.08 per MMBtu).

This month’s Trust administrative expenses totaled $48,800. 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 $19 and a draw of $48,781 from the Line of Credit will be used to pay the balance of Trust administrative expenses for the month of June which will bring the outstanding principal balance on the Line of Credit to $944,470.

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, 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

 

 

 

Source: View Original Filing on SEC EDGAR

FAQ

Why is San Juan Basin Royalty Trust (SJT) paying no June 2026 distribution?

The Trust is not declaring a June 2026 cash distribution because production costs and capital expenditures have exceeded gross proceeds, creating excess production costs and a deficit position, combined with continued low natural gas pricing, leaving no royalty income available for unitholders.

How large are San Juan Basin Royalty Trust’s excess production costs?

Cumulative excess production costs are approximately $9,258,749 gross, or $6,944,062 net to the Trust. This deficit increased by $774,601 gross and $580,950 net from the prior reporting period, and all future net proceeds will be applied to reducing this balance before distributions resume.

What revenues and costs did San Juan Basin Royalty Trust report for April 2026?

For April 2026, Hilcorp reported $3,023,335 of total revenue from the subject interests and $3,797,936 of production costs, excluding the excess cost balance. Costs exceeded revenues, contributing to the ongoing deficit and preventing royalty income from being available for distribution to unitholders.

What was the average natural gas price for San Juan Basin’s April 2026 production?

Dividing gas revenues by production volume yields an average April 2026 gas price of $1.28 per Mcf, or $1.15 per MMBtu. This reflects an increase of $0.08 per Mcf and $0.07 per MMBtu compared to March 2026, but prices remain relatively low overall.

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

Distributions can resume only after future net proceeds fully repay excess production costs, replenish a $2,000,000 cash reserve, and repay principal and interest on the Texas Bank line of credit. Until these conditions are met, all net proceeds will be applied to obligations rather than paid out.

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

To cover June administrative expenses, the Trust recorded $48,800 of expenses, $19 of interest income, and a $48,781 draw on its Texas Bank line of credit. This draw will bring the outstanding principal balance on the line of credit to $944,470, increasing leverage that must be repaid before distributions restart.

Filing Exhibits & Attachments

1 document

Press Releases