The trust is in a cash trap with no near-term path to distributions. Monitor monthly press releases for the cumulative excess production cost balance and any changes to Hilcorp's development plan or natural gas prices. A sustained recovery in natural gas prices above $2.50/Mcf or a significant reduction in production costs would be needed to restore distributable cash flow.
Price Chart
Executive Summary
San Juan Basin Royalty Trust declared no cash distribution for August 2026, marking the second consecutive month with no payout. The cumulative excess production cost deficit increased to $8.57M net to the Trust, and distributions will not resume until that deficit is fully repaid, a $2M reserve is replenished, and the $1.03M line of credit is repaid. The continued absence of distributions and deepening deficit signal a structurally impaired cash flow profile for the trust, with no near-term path to unitholder income.
Key Facts
- No cash distribution declared for August 2026, following no distribution in July 2026.
- Cumulative excess production costs increased to approximately $11,430,832 gross ($8,573,124 net to the Trust), up $1,803,903 gross ($1,352,927 net) from the prior month.
- Hilcorp reported $3,181,295 in total revenue from the Subject Interests for June 2026, but production costs (excluding excess costs) were $4,974,373, resulting in a net loss for the month.
- Gas volumes declined to 1,950,221 Mcf in June 2026 from 2,083,334 Mcf in May 2026.
- Average gas price improved to $1.46/Mcf in June 2026 from $1.23/Mcf in May 2026, but remains well below breakeven levels.
- Outstanding principal on the line of credit increased to $1,030,794 after a $31,986 draw to pay administrative expenses.
- Five of nine planned vertical wells were removed from Hilcorp's 2026 development plan, reducing planned capital expenditures by approximately $450,000.
- Distributions will not resume until the excess production cost deficit is repaid, a $2,000,000 reserve is replenished, and the line of credit is repaid in full.
Financial Impact
Cumulative excess production cost deficit of $8.57M net to the Trust, with no distributions until fully repaid, a $2M reserve is replenished, and the $1.03M line of credit is repaid. Monthly revenue of $3.18M is insufficient to cover monthly production costs of $4.97M.
Risk Factors
- Continued low natural gas prices may prevent the trust from ever repaying the excess production cost deficit.
- Further draws on the line of credit increase the repayment burden before distributions can resume.
- Removal of wells from Hilcorp's development plan reduces future production potential.
- The trust's ongoing audit of Hilcorp's costs could result in adjustments, but the outcome and timing are uncertain.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001193125-26-360880 |
| Document: sjt-ex99_1.htm | 0001193125-26-360880 |
| Document: 0001193125-26-360880-index-headers.html | 0001193125-26-360880 |
| Document: 0001193125-26-360880-index.html | 0001193125-26-360880 |
| Document: 0001193125-26-360880.txt | 0001193125-26-360880 |
| 8-K Data (Synthetic) | 0001193125-26-360880 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 20, 2026 6d ago | 8-K | $3.39 | awaiting T+5 | — | $3.37 (+0.59%) |
Aug 21, 2026 9w ago | 8-K | $2.72 $2.71 | ▲ +0.37% | ▲ +0.84% | $3.37 (−23.90%) |
Jul 21, 2026 13w ago | 8-K | $2.44 $2.54 | ▼ −4.10% | ▼ −5.33% | $3.37 (−38.11%) |
Jun 18, 2026 18w ago | 8-K | $3.11 $2.93 | ▲ +5.79% | ▲ +4.12% | $3.37 (−8.36%) |
May 18, 2026 23w ago | 8-K | $4.28 $4.12 | ▲ +3.74% | ▲ +5.36% | $3.37 (+21.26%) |
Apr 20, 2026 27w ago | 8-K | $4.54 $4.22 | ▲ +7.05% | ▲ +7.96% | $3.37 (+25.77%) |
US Market Status
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