No April payout as San Juan Basin (NYSE: SJT) faces excess costs

Rhea-AI Filing Summary

San Juan Basin Royalty Trust will pay no monthly cash distribution for April 2026. The Trustee cites excess production costs from prior periods on the Subject Interests and continued low natural gas prices, which together have eliminated royalty income for now.

Cumulative excess production costs stand at about $6.63 million gross ($4.97 million net to the Trust, and the deficit increased from last month. February 2026 revenues of $5.24 million were more than offset by $5.68 million of production costs, while average gas prices fell to $2.70 per Mcf.

No future distributions will be made until net proceeds fully repay excess production costs, restore a $2.0 million reserve, and repay principal and interest on the Trust’s line of credit, whose outstanding balance is $872,254. The Trust is relying on its line of credit and dwindling cash reserves to cover administrative expenses and interest.

Positive

• None.

Negative

• Monthly cash distributions are suspended until excess production costs, a $2.0 million reserve requirement, and all principal and interest on the line of credit are fully repaid, removing current income for unit holders.
• Cumulative excess production costs have grown to $6.63 million gross ($4.97 million net to the Trust), and February 2026 production costs exceeded revenues, underscoring ongoing cash flow pressure.
• Reliance on debt and shrinking reserves is increasing, with an outstanding line of credit balance of $872,254 and cash reserves reduced to $9,367 after interest payments.

Insights

Energy income securities analyst

Distribution suspension and rising excess costs are materially negative for income-focused holders.

San Juan Basin Royalty Trust is suspending its April 2026 cash distribution because royalty income is being fully absorbed by excess production costs and weak natural gas prices. Cumulative excess production costs of about $6.63M gross highlight how prior capital spending and operating costs are pressuring cash flow.

For February 2026, the Subject Interests generated $5.24M of revenue versus $5.68M of production costs, so there were no net proceeds for the Trust. Average gas price declined to $2.70 per Mcf, and gas volumes also fell compared with January, reinforcing commodity sensitivity.

The Trust must first repay excess production costs, then replenish a $2.0M reserve, and finally repay principal and interest on the $872,254 line of credit before resuming distributions. This sequence places unit holders behind multiple cash priorities. Ongoing audits of Hilcorp’s reporting and charges are noted, but the filing does not state any resolved outcome.

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): $6,631,825 Cumulative excess production costs (net to Trust): $4,973,869 Increase in excess cost deficit (gross): $445,006 +5 more

8 metrics

Cumulative excess production costs (gross) $6,631,825 Balance of excess production costs currently outstanding

Cumulative excess production costs (net to Trust) $4,973,869 Net excess production costs attributable to the Trust

Increase in excess cost deficit (gross) $445,006 Month-over-month increase in gross excess production costs

February 2026 total revenue $5,237,354 Revenue from Subject Interests for February 2026

February 2026 production costs $5,682,360 Production costs for Subject Interests, excluding excess costs

Average gas price February 2026 $2.70 per Mcf Gas revenues divided by gas production volume

Line of credit outstanding principal $872,254 Balance after January administrative expense funding

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

Key Terms

excess production costs, line of credit, royalty income, severance taxes, +1 more

5 terms

excess production costs financial

"Excess production costs occur when production costs and capital expenditures exceed the gross proceeds"

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 $121,741 from the Line of Credit will be used to pay the balance"

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.

royalty income financial

"the Trust will not receive royalty income as all net proceeds will be applied"

Royalty income is money a company or individual receives for allowing others to use its intellectual property, natural resources, or patented processes — like collecting rent when you let someone use your idea, song, mineral rights, or technology. It matters to investors because royalties can provide steady, often high-margin cash flow with low ongoing costs, making a business more predictable and easier to value; think of it as a durable revenue stream that keeps paying as long as the asset is in demand.

severance taxes financial

"consisting of $3,652,552 of lease operating expenses, $597,086 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"

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.

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 April 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 April 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 April 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 April 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:	April 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 April 2026

DALLAS, Texas, April 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 $6,631,825 gross ($4,973,869 net to the Trust), an increase in the deficit of $445,006 gross ($333,755 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 $5,237,354 of total revenue from the Subject Interests for the production month of February 2026, consisting of $5,108,104 of gas revenues, $129,250 of oil revenues.

For the Subject Interests, Hilcorp reported $5,682,360 of production costs (excluding the balance of excess production costs) for the production month of February 2026, consisting of $3,652,552 of lease operating expenses, $597,086 of severance taxes, and $1,432,722 of capital costs.

Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for February 2026 totaled 1,891,801 Mcf (2,102,001 MMBtu), as compared to 2,104,891 Mcf (2,338,767 MMBtu), for January 2026. Dividing gas revenues by production volume yielded an average gas price for February 2026 of $2.70 per Mcf ($2.43 per MMBtu), a decrease of $0.26 per Mcf ($0.23 per MMBtu) as compared to the average gas price for January 2026 of $2.96 per Mcf ($2.66 per MMBtu).

This month’s Trust administrative expenses totaled $126,748. 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 $117 and a draw of $121,741 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 $872,254.

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 March 2026. In April 2026, cash reserves in the amount of $4,890 will be utilized to pay interest on the Line of Credit, which will bring the balance of cash reserves maintained by the Trust to $9,367.

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 April 2026 distribution?

The Trust is paying no April 2026 distribution because excess production costs and low natural gas prices have fully absorbed royalty income. All current net proceeds are being applied to a growing excess production cost balance instead of being available for distribution to unit holders.

How large are San Juan Basin Royalty Trust (SJT) excess production costs?

Cumulative excess production costs are approximately $6,631,825 gross and $4,973,869 net to the Trust. This deficit rose by $445,006 gross and $333,755 net from the prior reporting period, signaling sustained pressure from production costs and capital expenditures on cash flow.

When can San Juan Basin Royalty Trust (SJT) resume cash distributions?

Distributions can resume only after future net proceeds fully repay excess production costs, replenish a $2,000,000 reserve, and repay principal and interest on the line of credit. Until these conditions are met, all net proceeds will be directed to these obligations instead of unit holder payouts.

What were San Juan Basin Royalty Trust (SJT) revenues and costs for February 2026?

For February 2026, Hilcorp reported $5,237,354 of total revenue from the Subject Interests and $5,682,360 of production costs. The cost structure, including lease operating expenses, severance taxes, and capital costs, exceeded revenues, leaving no net proceeds available for the Trust that month.

How did natural gas prices affect San Juan Basin Royalty Trust (SJT) in February 2026?

Average gas price for February 2026 was $2.70 per Mcf, down $0.26 from January’s $2.96. Combined with lower gas volumes, this price decline reduced revenues from the Subject Interests and contributed to production costs exceeding revenues for the period.

What is the status of San Juan Basin Royalty Trust (SJT) line of credit and reserves?

A draw of $121,741 brought the outstanding principal on the line of credit to $872,254. Cash reserves are being used to pay interest; after an April 2026 interest payment of $4,890, remaining cash reserves will stand at $9,367, indicating limited liquidity support.

Filing Exhibits & Attachments

1 document

Press Releases

• EX-99.1 EX-99.1 17.7 KB