San Juan Basin Royalty Trust (NYSE: SJT) payouts on hold amid cost deficit

Rhea-AI Filing Summary

SAN JUAN BASIN ROYALTY TRUST (SJT) reported that it will not declare a cash distribution for August 2026, citing excess production costs on its Subject Interests and continued low natural gas prices. Cumulative excess production costs total $11,430,832 gross ($8,573,124 net to the Trust, an increase of $1,803,903 gross ($1,352,927 net) from the prior month. For June 2026 production, Hilcorp reported $3,181,295 of total revenue and $4,974,373 of production costs (excluding the excess cost balance), so net proceeds remain insufficient to reduce the deficit. The Trust states that no distributions will resume until future net proceeds fully repay excess production costs, replenish a $2,000,000 reserve, and repay principal and interest on the Texas Bank line of credit, whose outstanding principal will be $1,030,794 after the August draw.

Positive

• None.

Negative

• No August 2026 cash distribution will be made, and distributions are suspended until excess production costs, a $2,000,000 reserve, and the line of credit are fully repaid.
• Cumulative excess production costs of $11,430,832 gross ($8,573,124 net) increased by $1,803,903 gross month over month, keeping the Trust in a deficit position.
• The Trust is relying on its line of credit, drawing $31,986 in August to fund administrative expenses, bringing the outstanding principal balance to $1,030,794.

Filing Explained

Five planned wells were removed; two of four remaining wells are complete, one is in progress, and one awaits connection.

The filing keeps the August distribution at zero: net proceeds remain applied to excess production costs, while five planned wells were removed from Hilcorp’s 2026 plan. Of the four remaining wells, two are complete, one is in progress, and one awaits third-party connection and flow.

Form 8-K reports a specified material event; here, the disclosed state is a continuing cash-distribution suspension rather than a completed return of royalty payments. The Trust also reports that future proceeds must repay excess costs, replenish a $2,000,000 reserve, and repay its line of credit before distributions resume.

For June production, gas volume fell to 1,950,221 Mcf from 2,083,334 Mcf in May, while the reported average gas price increased to $1.46 per Mcf from $1.23. June revenue of $3,181,295 remained below production costs of $4,974,373, excluding the existing excess-cost balance.

The August administrative expenses were $32,003; a $31,986 line-of-credit draw and $17 of interest income cover them, bringing outstanding principal to $1,030,794. The Trust’s compliance audit of Hilcorp’s revenues, costs, pricing, and related reporting remains ongoing.

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, or exhibit attachments filed with this report.

Key Figures

Cumulative excess production costs (gross): $11,430,832 Cumulative excess production costs (net to Trust): $8,573,124 Increase in excess production costs (gross): $1,803,903 +5 more

8 metrics

Cumulative excess production costs (gross) $11,430,832 Current balance of excess production costs

Cumulative excess production costs (net to Trust) $8,573,124 Net balance attributable to the Trust

Increase in excess production costs (gross) $1,803,903 Increase from last month’s reporting period

June 2026 total revenue from Subject Interests $3,181,295 Includes $2,843,843 gas and $337,452 oil revenues

June 2026 production costs (excluding excess costs) $4,974,373 Lease operating, severance taxes, and capital costs

Average gas price June 2026 $1.46 per Mcf ($1.31 per MMBtu) Based on June 2026 gas revenues and volumes

Outstanding line of credit principal $1,030,794 Balance after August 2026 draw

Target reserve before distributions resume $2,000,000 Reserve to be replenished before paying distributions

Key Terms

excess production costs, royalty interest, severance taxes, Line of Credit, +1 more

5 terms

excess production costs financial

"Excess production costs occur when production costs and capital expenditures exceed"

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.

royalty interest financial

"excess production costs incurred during prior periods for the Trust’s royalty interest burdening"

A royalty interest is a contractual right to receive a portion of revenue or production from an asset—such as a mine, oil well, patent, or drug—without owning or operating the underlying business. Investors value royalties because they provide a form of passive, often predictable cash flow that depends on how much the asset produces and the price it commands; think of it as collecting rent on someone else’s income-producing property, with returns tied to output and market prices.

severance taxes financial

"consisting of $2,921,477 of lease operating expenses, $169,415 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.

Line of Credit financial

"repay the principal and interest on the Trust’s line of credit at Texas Bank"

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 reserve financial

"the Trustee is authorized to retain, in its sole discretion, a cash reserve for payment"

Cash reserve is the amount of readily available cash a company keeps on hand to pay bills, handle unexpected costs, or seize quick opportunities—like an emergency fund for a household. For investors, a healthy cash reserve signals that a business can weather downturns, fund short-term needs without borrowing, and maintain flexibility for investments or dividends; too much idle cash, however, may suggest missed growth opportunities.

Earnings Snapshot

Total revenue from Subject Interests: $3,181,295

production month of June 2026

Total revenue from Subject Interests $3,181,295 Not stated vs prior month

Production costs (excluding excess costs) $4,974,373 Not stated vs prior month

Cumulative excess production costs (gross) $11,430,832 Increase of $1,803,903 gross from last month

Average gas price per Mcf $1.46 Increase of $0.23 per Mcf vs May 2026

FAQ

Why is SAN JUAN BASIN ROYALTY TRUST (SJT) paying no August 2026 distribution?

The Trust will pay no August 2026 cash distribution because excess production costs from prior periods and continued low natural gas prices mean there are no net proceeds available for distribution.

What is the current excess production cost balance for SJT?

The balance of cumulative excess production costs is approximately $11,430,832 gross ($8,573,124 net to the Trust), an increase of $1,803,903 gross ($1,352,927 net) from the previous reporting period.

When can SJT resume cash distributions to unitholders?

Distributions will resume only after future net proceeds fully repay excess production costs, replenish a $2,000,000 reserve, and repay principal and interest on the Trust’s Texas Bank line of credit.

What were SJT’s June 2026 revenues and production costs?

For June 2026 production, Hilcorp reported $3,181,295 of total revenue (including $2,843,843 gas and $337,452 oil) and $4,974,373 of production costs, excluding the balance of excess production costs.

How much has SJT borrowed under its line of credit?

A draw of $31,986 in August 2026 will bring the outstanding principal balance on the Trust’s line of credit with Texas Bank to $1,030,794.

What were SJT’s average natural gas prices for June 2026?

For June 2026, the average gas price was $1.46 per Mcf ($1.31 per MMBtu), up by $0.23 per Mcf ($0.20 per MMBtu) compared with May 2026.

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

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Understanding 8-K Material Events →

Available on EDGAR 08/21/2026 - 02:47 PM Accepted by SEC EDGAR 08/21/2026 - 02:47 PM Learn about SEC filing dates

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 August 21, 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 August 21, 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 August 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 August 21, 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:	August 21, 2026	By:	/S/ NANCY WILLIS
			Nancy Willis Director of Royalty Trust Services

News Release

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

DALLAS, Texas, August 21, 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 $11,430,832 gross ($8,573,124 net to the Trust), an increase in the deficit of $1,803,903 gross ($1,352,927 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 $3,181,295 of total revenue from the Subject Interests for the production month of June 2026, consisting of $2,843,843 of gas revenues, and $337,452 of oil revenues.

For the Subject Interests, Hilcorp reported $4,974,373 of production costs (excluding the balance of excess production costs) for the production month of June 2026, consisting of $2,921,477 of lease operating expenses, $169,415 of severance taxes, and $1,883,481 of capital costs.

Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for June 2026 totaled 1,950,221 Mcf (2,166,912 MMBtu), as compared to 2,083,334 Mcf (2,314,816 MMBtu), for May 2026. Dividing gas revenues by production volume yielded an average gas price for June 2026 of $1.46 per Mcf ($1.31 per MMBtu), an increase of $0.23 per Mcf ($0.20 per MMBtu) as compared to the average gas price for May 2026 of $1.23 per Mcf ($1.11 per MMBtu).

This month’s Trust administrative expenses totaled $32,003. 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 $17 and a draw of $31,986 from the Line of Credit will be used to pay the balance of Trust administrative expenses for the month of August which will bring the outstanding principal balance on the Line of Credit to $1,030,794.

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.

Hilcorp reported to the Trust that five of the nine vertical wells previously included in Hilcorp’s 2026 development plan for the Subject Interests have been removed from Hilcorp’s current plan due to changes in Hilcorp’s drilling schedule, representing approximately $450,000 of total capital expenditures from the initial budget. Hilcorp further advised that, of the remaining four wells, one is in progress, two have been completed, and one is awaiting third-party connection and flow.

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

Filing Exhibits & Attachments

1 document

Press Releases

• EX-99.1 EX-99.1 24.5 KB