San Juan Basin Royalty Trust Declares No Cash Distribution for June 2025 Due to Excess Production Costs

San Juan Basin Royalty Trust (SJT) declared no cash distribution for June 2025 due to excess production costs totaling $14.77 million gross. The trust has a cash reserve of only $32,747 and has secured a $2 million line of credit with Texas Bank to cover administrative expenses. To cut costs, SJT will self-publish press releases on its website instead of using wire distribution until its cash reserves are replenished to $2 million.

San Juan Basin Royalty Trust (SJT) has announced that it will not distribute cash to unitholders for June 2025 due to ongoing excess production costs totaling approximately $14.77 million gross ($11.08 million net). This decision is a continuation of the Trust's financial challenges, which have been exacerbated by significant production costs incurred from Hilcorp's drilling of two horizontal wells in 2024 [1].

The Trust's cash reserves have dwindled to just $32,747 as of May 31, 2025, forcing the Trust to establish a $2 million line of credit with Texas Bank to manage its administrative expenses [1]. For April 2025, Hilcorp reported total revenues of $4.56 million from its Subject Interests, with gas revenues of $4.40 million and oil revenues of $0.16 million. However, gas production volumes decreased to 2.35 million Mcf, and the average gas price dropped to $1.87 per Mcf, contributing to the Trust's financial distress [1].

In response to its financial constraints, the Trust has taken additional cost-cutting measures. It will self-publish press releases on its website starting July 21, 2025, discontinuing wire distribution. The Trust has stated that distributions will not resume until it can repay excess production costs, replenish a $2 million reserve, and repay its line of credit obligations [1].

The Trust's financial situation remains dire, with no distribution, $11 million in excess costs, depleted reserves, and dependence on a credit line. The Trust is currently facing approximately $14.8 million gross ($11.1 million net) in excess production costs, with a reduction of only $294,238 from the previous month. This deficit is insufficient to enable distributions to resume in the near term [1].

References:
[1] https://www.stocktitan.net/news/SJT/san-juan-basin-royalty-trust-declares-no-cash-distribution-for-june-gtham5h8u3fv.html
[2] https://www.gurufocus.com/news/2937007/san-juan-basin-royalty-trust-declares-no-cash-distribution-for-june-2025-sjt-stock-news
[3] https://www.prnewswire.com/news-releases/san-juan-basin-royalty-trust-declares-no-cash-distribution-for-june-2025-302486720.html