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): March 21, 2022
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
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 March 21, 2022, 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 $5,551,298.95 or $0.119104 per Unit, based primarily upon the reported production during the month of January 2022 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 April 14, 2022, to the Unit Holders of record as of March 31, 2022.
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 March 21, 2022. | |
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: March 21, 2022 | 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 March 2022
HOUSTON, Texas, March 21,2022 – PNC Bank, National Association, as the trustee (the “Trustee”) of the San Juan Basin Royalty Trust (the “Trust”) (NYSE: SJT), today declared a monthly cash distribution to the holders (the “Unit Holders”) of its units of beneficial interest (the “Units”) of $ 5,551,298.95 or $0.119104 per Unit, based primarily upon the reported production of the Trust’s subject interests (the “Subject Interests”) during the month of January 2022. The distribution is payable April 14, 2022, to the Unit Holders of record as of March 31, 2022.
For the production month of January 2022, the owner of the Subject Interests, Hilcorp San Juan L.P. and the operator of the Subject Interests, Hilcorp Energy Company (collectively, “Hilcorp”), reported to the Trust net profits of $7,797,678 ($5,848,258 net royalty amount to the Trust).
Hilcorp reported $10,704,254 of total revenue from the Subject Interests for the production month of January 2022. This amount includes other revenues of $(165,893), which includes $(356,803) of prior period non-operated revenue actualizations and related interest for the production months of November 2020 through October 2021, and $190,910 of revenue plus interest related to audit exceptions. For the Subject Interests, Hilcorp reported $2,906,576 of production costs for the production month of January 2022, consisting of $1,542,682 of lease operating expenses, $1,359,889 of severance taxes and $4,005 of capital costs.
Based upon the information that Hilcorp provided to the Trust, gas volumes for the Subject Interests for January 2022 totaled 1,986,976 Mcf (2,207,751 MMBtu), as compared to 2,108,852 Mcf (2,343,169 MMBtu) for December 2021. Dividing revenues by production volume yielded an average gas price for January 2022 of $5.42 per Mcf ($4.88 per MMBtu), as compared to an average gas price for December 2021 of $4.38 per Mcf ($3.94 per MMBtu).
Hilcorp continues to inform the Trust that the production numbers reported to the Trust are based upon actual, instead of estimated, production for the production month and that it intends to continue to report to the Trust actual production numbers. Hilcorp informed the Trust that it will account for and report any non-operated revenue and non-operated severance tax actualizations remaining from prior periods in future distribution reports, but such amounts continue to be unknown.
The Trustee 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 for potential violations of the Trust’s rights.
| 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,” “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.