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): December 20, 2021
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.) |
PNC BANK, NATIONAL ASSOCIATION
PNC Asset Management Group
2200 Post Oak Blvd., Floor 18
Houston, TX 77056
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code): (866) 809-4553
(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 | ||
| 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 December 20, 2021, 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 (the “Unit Holders”) of $5,240,726.18 or $0.112441 per Unit, based primarily upon the reported production during the month of October 2021 by the owner of the Trust’s subject interests, Hilcorp San Juan L.P. (“Hilcorp”), and nonrecurring reimbursements to the Trust from prior month actualizations and adjustments, plus interest. The distribution is payable January 14, 2022, to the Unit Holders of record as of December 31, 2021.
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 December 20, 2021. | |
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.
| PNC BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE SAN JUAN BASIN ROYALTY TRUST (Registrant) | ||||||
| Date: December 20, 2021 |
By: |
/s/ James R. Wilharm | ||||
| James R. Wilharm | ||||||
| Senior Vice President and Director of Trust Real Estate Services | ||||||
4
Exhibit 99.1
San Juan Basin Royalty Trust
News Release
San Juan Basin Royalty Trust Declares Cash Distribution for December 2021
HOUSTON, Texas, December 20, 2021 – PNC Bank, National Association, as the successor trustee (the “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 (the “Unit Holders”) of $5,240,726.18 or $0.112441 per Unit, based primarily upon the reported production during the month of October 2021. The distribution is payable January 14, 2022, to the Unit Holders of record as of December 31, 2021.
For the production month of October 2021, the operator of the Trust’s subject interests, Hilcorp San Juan L.P. (“Hilcorp”), reported to the Trust net profits of $7,120,430 ($5,340,323 net royalty amount to the Trust).
Hilcorp reported $10,514,072 of revenue from the Subject Interests for the production month of October 2021. The reporting month of October 2021 also included other revenues of $201,015 consisting of $101,015 in nonrecurring additional revenue related to granted audit exceptions and interest, and an estimated $100,000 for non-operated income. For the Subject Interests, Hilcorp reported $3,393,641 of production costs during the production month of October 2021. Production costs consist of $2,025,265 of lease operating expenses, $1,352,895 of severance taxes and $15,481 of capital costs.
Based upon information Hilcorp provided to the Trust, gas volumes for the subject interests for October 2021 totaled 2,238,507 Mcf (2,487,230 MMBtu), as compared to 2,120,403 Mcf (2,356,003 MMBtu) for September 2021, excluding prior actualizations. Dividing revenues by production volume yielded an average gas price for October 2021 of $4.35 per Mcf ($3.92 per MMBtu), as compared to an average gas price for September 2021, excluding prior actualizations, of $3.60 per Mcf ($3.24 per MMBtu).
Hilcorp has informed the Trust that it has completed the implementation of its new accounting system. Hilcorp began reporting actual, instead of estimated, production for the June 2021 production month (corresponding to the August 2021 Trust reporting month) and that it intends to continue to report actual production going forward. The remaining months of non-operated revenue and non-operated severance tax actualizations for prior periods will be accounted for and reported in future distribution reports. At this time, the amount of these actualizations is unknown. The Trustee will coordinate with Hilcorp on the timing of any further actualizations and will communicate that timing to the Unit Holders.
The Trustee also continues to engage with Hilcorp regarding its ongoing accounting and reporting to the Trust, and the Trust’s third-party compliance auditors continue to audit all payments made by Hilcorp to the Trust, including adjustments, actualizations, and recoupments. The Trustee continues to consult with outside counsel to review the rights of the Trust with respect to these matters and to evaluate any available potential legal remedies.
Contact: San Juan Basin Royalty Trust
PNC Bank, National Association
PNC Asset Management Group
2200 Post Oak Blvd., Floor 18
Houston, TX 77056
website: www.sjbrt.com
e-mail: sjt@pnc.com
James R. Wilharm, Senior Vice President and Director of Trust Real Estate Services
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,” “intends,” “unknown,” “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.
2