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): October 4, 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 October 4, 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., 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.
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 dof 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 |
Description | |
| 99.1 | Press Release, dated October 4, 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: October 4, 2018 | By: | /s/ Joshua R. Peterson | ||||
| Joshua R. Peterson | ||||||
| Senior Vice President and Trust Officer | ||||||
4
Exhibit 99.1
San Juan Basin Royalty Trust
|
News Release
|
San Juan Basin Royalty Trust Announces Expected Positive Revisions to its Previous September 2018 Distribution
FORT WORTH, Texas, October 4, 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”), 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.
| 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, Senior Vice President & Trust Officer |
| Kaye Wilke, Investor Relations, toll-free: (866) 809-4553 |
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.