UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 19, 2018
San Juan Basin Royalty Trust
(Exact name of registrant as specified in its charter)
| Texas | 1-8032 | 75-6279898 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
Compass Bank, Trust Department
300 W. 7th Street, Suite B
Fort Worth, Texas 76102
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code): (866) 809-4553
N/A
(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 (see General Instruction A.2. below):
| ☐ | 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)) |
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 January 19, 2018, the San Juan Basin Royalty Trust (the “Trust”) issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing a monthly cash distribution to the holders of its units of beneficial interest of $3,115,522.27 or $0.066844 per unit, based principally upon estimated production during the month of November 2017, as further described below. The distribution is payable February 14, 2018, to unit holders of record as of January 31, 2018.
The sale of San Juan Basin assets, including the oil and gas interests from which the Trust’s royalty interest was carved (“Subject Interests”), from Burlington Resources Oil & Gas Company LP (“Burlington”) to Hilcorp San Juan L.P. (“Hilcorp”) closed on July 31, 2017. Due to the transition from Burlington, Hilcorp informed the Trust that Hilcorp does not yet have all of the revenue decks for November 2017 installed, and therefore does not have the appropriate detail to provide actual revenue numbers for the January 2018 distribution. Therefore, Hilcorp estimated the January 2018 revenue distribution based on the revenue distribution detail for the July 2017 production month previously provided by Burlington and rounded to the nearest thousand.
The January 2018 declaration of cash distribution includes an additional $1.0 million in estimated gross revenue based on Hilcorp’s knowledge that production volumes in November 2017 were in line with production volumes during the previous month.
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. |
(d) Exhibits.
The following exhibits are filed in accordance with the provisions of Item 601 of Regulation S-K:
| Exhibit No. |
Description | |
| 99.1 | Press Release, dated January 19, 2018. |
2
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press Release, dated January 19, 2018. |
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| COMPASS BANK, AS TRUSTEE FOR THE SAN JUAN BASIN ROYALTY TRUST (Registrant) | ||||||
| Date: January 19, 2018 | By: | /s/ Sharon Fontenot | ||||
| Sharon Fontenot | ||||||
| Trust Officer | ||||||
4
Exhibit 99.1
San Juan Basin Royalty Trust
|
News Release
|
San Juan Basin Royalty Trust
Declares January Cash Distribution
FORT WORTH, Texas, January 19, 2018 – Compass Bank, as Trustee of the San Juan Basin Royalty Trust (the “Trust”) (NYSE:SJT), today declared a monthly cash distribution to the holders of its units of beneficial interest of $3,115,522.27 or $0.066844 per unit, based principally upon estimated production during the month of November 2017. The distribution is payable February 14, 2018, to unit holders of record as of January 31, 2018.
The sale of San Juan Basin assets, including the oil and gas interests from which the Trust’s royalty interest was carved (“Subject Interests”), from Burlington Resources Oil & Gas Company LP (“Burlington”) to Hilcorp San Juan L.P. (“Hilcorp”) closed on July 31, 2017. Due to the transition from Burlington, Hilcorp informed the Trust that Hilcorp does not yet have all of the revenue decks for November 2017 installed, and therefore does not have the appropriate detail to provide actual revenue numbers for the January 2018 distribution.
Therefore, Hilcorp estimated the January 2018 distribution based on the revenue distribution detail for the July 2017 production month (September distribution month) previously provided by Burlington and rounded to the nearest thousand. The January 2018 declaration of cash distribution includes an additional $1.0 million in estimated gross revenue based on Hilcorp’s knowledge that production volumes in November 2017 were in line with production volumes during the previous month. The January 2018 declaration of cash distribution includes actual expenses for the month of November, however, severance taxes continue to be estimated.
Hilcorp has also informed the Trust that Hilcorp may need to use estimated revenue and severance tax numbers to calculate distributions for subsequent months. Once Hilcorp has all of the revenue decks finalized, Hilcorp will reconcile the actual revenue numbers versus the estimated numbers and true-up any distributions, as needed.
Estimated gas production for the Subject Interests totaled 2,155,000 Mcf (2,394,444 MMBtu) for November 2017. Dividing revenues by production volume yielded an average estimated gas price for November 2017 of $2.60 per Mcf ($2.34 per MMBtu) which was identical to August, September and October 2017.
The average monthly gas price Hilcorp reports to the Trust is a calculated price. It is determined by dividing gross monthly revenue by production volume, and therefore, it does not represent an average of actual sales prices. The average gas price may vary from the posted index price for the San Juan Basin. The index price is a gross sales price, and the revenues used in the calculation of average gas prices are net of transportation, processing and gathering costs. Furthermore, the distribution to the Trust in any given month may include significant volume adjustments for sales in prior months that reflect pricing for those prior months.
For the month ended November 2017, capital costs were $66,207, lease operating expenses were $1,783,260 and property taxes were $26. Estimated severance taxes were $594,800.
| Contact: | San Juan Basin Royalty Trust |
| Compass Bank, Trustee |
| 300 West Seventh St., Suite B, Fort Worth, Texas 76102 |
| website: www.sjbrt.com e-mail: sjt.us@bbva.com |
| Joshua R. Peterson, Vice President & Senior Trust Officer |
| Kaye Wilke, Investor Relations, toll-free: (866) 809-4553 |