The San Juan Basin Royalty Trust (NYSE: SJT) announced on October 20, 2026, that it will not declare a monthly cash distribution to its unit holders for October. The decision was made due to excess production costs associated with the Trust's subject interests and continued low natural gas pricing.
According to the Trustee, Argent Trust Company, the balance of cumulative excess production costs is currently approximately $12,423,018 gross ($9,317,264 net to the Trust). This represents a decrease of $130,448 gross ($97,836 net) from the previous month. Hilcorp, the operator, will continue to charge this balance to the Trust's net proceeds each month. Consequently, the Trust will not receive royalty income until the balance is paid in full.
Future distributions will not resume until net proceeds are sufficient to (1) repay the balance of excess production costs, (2) replenish a reserve of $2,000,000, and (3) repay the principal and interest on the Trust's line of credit at Texas Bank.
For the production month of August 2026, Hilcorp reported total revenue of $4,868,781 from the Subject Interests, consisting of $4,688,244 in gas revenues and $180,537 in oil revenues. Production costs for the same month totaled $4,738,333, including $2,899,702 in lease operating expenses, $317,045 in severance taxes, and $1,521,586 in capital costs.
Gas volumes for August 2026 totaled 2,057,618 Mcf (2,286,242 MMBtu), resulting in an average gas price of $2.28 per Mcf ($2.05 per MMBtu). This price increased by $0.27 per Mcf ($0.24 per MMBtu) compared to the average price in July 2026.
Trust administrative expenses for October totaled $80,118. The Trust used interest income of $17 and a draw of $80,101 from its Line of Credit to cover these expenses, bringing the outstanding principal balance on the credit line to $1,155,501. The Trust maintains a cash reserve of $3,891.
The Trustee noted that it continues to engage with Hilcorp regarding accounting and reporting and that the Trust's third-party auditors are conducting a comprehensive audit of payments, including sales revenues, production costs, and capital expenditures.
