San Juan Basin Royalty Trust Declares No Cash Distribution for August 2025.

San Juan Basin Royalty Trust will not declare a cash distribution for August 2025 due to excess production costs and low natural gas pricing. The deficit in excess production costs is currently $15,713,422 gross, a decrease of $218,379 gross. The Trust's subject interests had high production costs and low revenue in June 2025.

San Juan Basin Royalty Trust (NYSE: SJT) has announced that it will not declare a cash distribution for August 2025, citing excess production costs and low natural gas pricing. The trust, which operates as an express trust in Texas, holds royalty interests in oil and gas properties in the San Juan Basin.

The trust reported that its subject interests incurred high production costs and low revenue in June 2025. The cumulative deficit in excess production costs stood at $15,713,422 gross, a decrease of $218,379 gross from the previous month [3]. This deficit was primarily due to production costs exceeding gross proceeds, with Hilcorp, an oil and gas producer in the U.S., reporting $5,050,458 in production costs for the month of June 2025 [3].

The average gas price for June 2025 was $2.24 per Mcf, an increase of $0.62 per Mcf from May 2025. However, the increase in gas prices was not sufficient to cover the excess production costs. The trust's administrative expenses for August 2025 totaled $20,722, with interest income and cash reserves being utilized to pay the balance of these expenses [3].

The trust's investment in the San Juan Basin is heavily dependent on the volatile oil and gas industry. Recent events have negatively impacted the trust's performance, and its investment in the San Juan Basin is now vulnerable to changes in the energy market [2]. The trust's ability to generate sufficient revenue to meet its commitments is uncertain, and it has had to take out a bank loan to cover its expenses [2].

The trust will not resume distributions until the balance of excess production costs is repaid, reserves are restored to $2 million, and the credit is fully repaid. Previously, the company drew on a $2 million line of credit in July to cover expenses [1].

In conclusion, the San Juan Basin Royalty Trust is facing significant economic challenges that have led to a rating downgrade and the suspension of cash distributions. The trust's performance is heavily dependent on the volatile oil and gas industry, and its investment in the San Juan Basin is now vulnerable to changes in the energy market.

References:
[1] https://finance.yahoo.com/news/san-juan-basin-royalty-trust-044632577.html
[2] https://www.ainvest.com/news/san-juan-basin-royalty-trust-downgrading-rating-worsening-economic-outlook-2508/
[3] https://www.marketscreener.com/news/san-juan-basin-royalty-trust-august-19-2025-san-juan-basin-royalty-trust-declares-august-cash-dis-ce7c51ddda88f12d