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): September 20, 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 7.01. | Regulation FD Disclosure. |
On September 20, 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 that Hilcorp San Juan L.P. had provided the Trust with its Revised 2018 Capital Expenditures Plan.
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 September 20, 2018. |
2
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: September 20, 2018 | By: | /s/ Joshua R. Peterson | ||||
| Joshua R. Peterson | ||||||
| Vice President and Senior Trust Officer | ||||||
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Exhibit 99.1
San Juan Basin Royalty Trust
|
News Release
|
San Juan Basin Royalty Trust Announces Hilcorp’s Revised 2018 Capital Expenditures Plan
FORT WORTH, Texas, September 20, 2018 – Compass Bank, as Trustee of the San Juan Basin Royalty Trust (the “Trust”) (NYSE:SJT), today reported that Hilcorp San Juan L.P. (“Hilcorp”) has provided the Trust with its Revised 2018 Capital Expenditures Plan (“Revised Plan”).
Hilcorp’s original 2018 capital expenditures plan delivered to the Trust in February 2018 reported estimated capital expenditures of $547,800 for the Trust’s subject interests, which included two facility projects and seven well recompletions. The Revised Plan of $3,924,500 for the subject interests includes two facility projects (unchanged) and seventeen well recompletions.
The majority of the recompletions are occurring in the San Juan 29-5 unit. Based on the Revised Plan, total planned capital expenditures for the Trust’s fourth quarter of 2018 are estimated at $662,000. Hilcorp advised the trust that actual costs could be higher or lower, however, it believes that all major projects have been identified and included in the Revised Plan.
A senior representative from Hilcorp has informed the Trust that “The growth in production and increase in investment activity is due to Hilcorp finding high quality projects to pursue, even after the beginning of the year budget estimates were provided. These projects were not identified by the previous operator. As Hilcorp discovers these projects, we react quickly to implement them to maximize asset value.”
Hilcorp has further advised the Trust that all capital investment decisions are made under the current commodity price landscape, with further downside price scenarios tested. Hilcorp has informed the Trust that it believes that the recompletion program underway in the San Juan basin is highly economic, even at depressed pricing levels. The increased production volumes reported in September 2018 are due to increased capital and expense spending for recompletions. Hilcorp has further informed the Trust that it believes that it continues to find high quality downhole and surface facility optimizations to invest in.
As previously announced on September 18, 2018, Hilcorp’s increased capital expenditures resulted in excess production costs. Excess production costs occur when production costs and capital expenditures exceed the gross proceeds for a certain period. Hilcorp will charge the September 2018 excess production costs of $105,585 to the Trust in the October 2018 reporting period.
| 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 |