FORT WORTH, Texas--(BUSINESS WIRE)--
Compass Bank, as Trustee of the San Juan Basin Royalty Trust (the
“Trust”) (NYSE:SJT), today reported that Hilcorp San Juan L.P.
(“Hilcorp”), the owner of the subject interests, has advised the Trust
that it should expect to receive a positive adjustment to its September
2018 distribution of approximately $2.2 million, or approximately
$0.0472 per unit of beneficial interest (“Units”).
Following July’s excess production costs charged by Hilcorp to the Trust
that resulted in no distribution being paid by the Trust to the holders
of its Units (the “Unit Holders”) in September 2018, the Trust’s
external compliance auditors, at the Trustee’s request, investigated the
increased capital expenditures for well recompletions charged to the
Trust. The Trust’s external compliance auditors reviewed the information
provided to the Trust by Hilcorp and subsequently informed Hilcorp that
the Trust’s 75% net overriding royalty interest did not burden Hilcorp’s
working interest in each of the wells for which the Trust was charged
recompletion capital expenditures. As a result, such expenditures should
not have been charged to the Trust. A representative of Hilcorp
confirmed the error in the September 2018 distribution and stated that
it anticipates making the corrections, plus interest, in the October
2018 distribution to the Trust. The Trust’s external compliance auditors
and Hilcorp are working closely to fix the issues that resulted in
Hilcorp attributing the incorrect well recompletion costs to the Trust.
For the month ended July 2018, Hilcorp reported to the Trust capital
expenditures of $2,721,872 that were comprised mostly of well
recompletion costs in the San Juan 29-5 unit that should not have been
attributable to the Trust. Hilcorp is reviewing its Revised 2018 Capital
Expenditure Plan that the Trust disclosed on September 20, 2018, to
determine how much of the disclosed future capital expenses would remain
attributable to the Trust. The Trust intends to disclose such
information to its Unit Holders following receipt and verification.
Hilcorp has reconfirmed to the Trust that it intends to true-up gas
production for April, May and June 2018, and oil and gas production for
November 2017.
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 “expects,” “estimates,” “anticipates,”
“should,” “plan,” “intend,” 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.
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San Juan Basin Royalty Trust
Compass Bank, Trustee
Joshua R.
Peterson, Senior Vice President & Trust Officer
Kaye Wilke,
Investor Relations, toll-free: 866-809-4553
sjt.us@bbva.com
www.sjbrt.com
Source: San Juan Basin Royalty Trust