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 21, 2019
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.) |
BBVA USA, 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)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Units | SJT | NYSE |
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 21, 2019, 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 it will not declare a monthly cash distribution to the holders of its Units of beneficial interest due to excess production costs for the month of August 2019.
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 |
Description | |
| 99.1 | Press Release, dated October 21, 2019. | |
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.
| BBVA USA, AS TRUSTEE FOR THE SAN JUAN BASIN ROYALTY TRUST (Registrant) | ||||
| Date: October 21, 2019 | 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 Declares No Cash Distribution for October 2019
FORT WORTH, Texas, October 21, 2019 – BBVA USA, as Trustee of the San Juan Basin Royalty Trust (the “Trust”) (NYSE:SJT), today confirmed that it will not declare a monthly cash distribution to the holders of its Units of beneficial interest (the “Unit Holders”) due to excess production costs. Excess production costs occur when production costs and capital expenditures exceed the gross proceeds for a certain period.
For the production month of August 2019, the operator of the Trust’s subject interests, Hilcorp San Juan L.P. (“Hilcorp”), reported to the Trust excess production costs of $443,406 gross ($332,555 net to the Trust). Hilcorp will charge the excess production costs to next month’s distribution. Including the excess production costs for August 2019, the total reported excess production that have accumulated against the subject interests’ royalty distributions since the June 2019 distribution are $2,614,448 gross ($1,960,836 net to the Trust).
The Trust will utilize its cash reserves to pay the Trust’s administrative expenses of $63,898 for the month. No cash distributions will be distributed by the Trust until future net proceeds are sufficient to pay then-current Trust liabilities and replenish cash reserves that, as of September 30, 2019, have been reduced to $580,606.
Based upon information provided to the Trust by Hilcorp, gas production for the subject interests totaled 911,518 Mcf (1,012,798 MMBtu) for August 2019, as compared to 2,331,807 Mcf (2,590,897 MMBtu) for July 2019. Dividing revenues by production volume yielded an average gas price for August 2019 of $1.84 per Mcf ($1.66 per MMBtu), as compared to an average gas price for July 2019 of $1.42 per Mcf ($1.28 per MMBtu).
Hilcorp has advised the Trust that the August 2019 reporting month included a $739,794 reduction due to a revenue and severance tax true-up for August 2017. Hilcorp also reported that for the reporting month of August 2019, revenue included an estimated $169,000 for non-operated revenue. For the month ended August 2019, Hilcorp reported to the Trust capital costs of $174,446, lease operating expenses and property taxes of $2,266,723, and severance taxes of $102,818.
| Contact: | San Juan Basin Royalty Trust | |
| BBVA USA, 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 “estimates,” “anticipates,” “could,” “plan,” 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.