TO OUR UNIT HOLDERS

We are pleased to present the 2021 3rd Quarter Report (this "Report") of the San Juan Basin Royalty Trust (the "Trust") to the holders (the "Unit Holders") of units of beneficial interest in the Trust (the "Units"). The principal asset of the Trust is a 75% net overriding royalty interest (the "Royalty") that is carved out of certain oil and gas leasehold and royalty interests in properties located in the San Juan Basin of New Mexico (the "Subject Interests"). The Subject Interests are owned by Hilcorp San Juan L.P. ("Hilcorp").

On June 1, 2021, The PNC Financial Services Group, Inc. ("PNC") announced that it had completed the purchase of BBVA USA Bancshares, Inc., a financial holding company, including its U.S. banking subsidiary, BBVA USA, an Alabama-chartered bank and trustee of the Trust ("BBVA USA"). On October 8, 2021, PNC Bank, an indirect wholly owned subsidiary of PNC, succeeded BBVA USA as the trustee of the Trust following BBVA USA's merger with and into PNC Bank.

Royalty income distributed by Hilcorp to the Trust, which consists of monthly net proceeds attributable to the Royalty, was approximately $6.1 million for the three months ended September 30, 2021. There was no Royalty income during the three months ended September 30, 2020 due to excess production costs from the April 2020 production month. The average natural gas price increased from $1.46 per Mcf for the three months ended September 30, 2020 to $2.74 per Mcf for the three months ended September 30, 2021. Production of natural gas from the Subject Interests increased from 5,786,304 Mcf for the three months ended September 30, 2020 to 6,410,955 Mcf for the three months ended September 30, 2021.

Distributable income, which is the amount that the Trust distributes to the Unit Holders from the Royalty income less the amount of expenses paid by the Trust and any changes in cash reserves, was $5.7 million ($0.121735 per Unit) for the three months ended September 30, 2021. There was no distributable income during the three months ended September 30, 2020.

Based on 46,608,796 Units outstanding, the per-Unit distributions during the third quarter of 2021 were as follows:

July

$ 0.084740

August

0.000000

September

0.036995

Quarter Total

$ 0.121735

S an Juan B asin

Royalt y Tr us t

2021 T hir d Q uar te r

Interest income was lower for the three months ended September 30, 2021, as compared to the same period in 2020, due primarily to lower yields on short-term investments held by the Trust.

General and administrative expenses increased approximately 33% for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020. The increase in general and administrative expenses was primarily attributable to differences in timing in the receipt and payment of certain expenses by the Trust and increased legal expenses during the transition from BBVA to PNC Bank as the Trustee.

Total cash reserves were $1.0 million as of September 30, 2021. The Trustee does not anticipate any increases to the cash reserve above a level of $1.0 million in 2021, although it cannot guarantee that the Trustee will not increase such cash reserves in the future.

Hilcorp's capital expenditures decreased approximately $166,000 for the three months ended September 30, 2021, compared to the three months ended September 30, 2020. The decrease is due primarily to a credit as a result of true-ups for the January through April 2021 production months. Hilcorp's 2021 capital project plan for the Subject Interests calls for total capital spending of $0.3 million for fiscal 2021.

Royalty income for the three months ended September 30, 2021 is associated with oil and natural gas production during May through July 2021 from the Subject Interests. Production of oil and natural gas and related average sales prices attributable to each of the Subject Interests and the Royalty for the three months ended September 30, 2021 and 2020 were as follows:

For the Three Months Ended September 30,

2021

2020

Natural

Oil and

Natural

Oil and

Gas

Condensate

Gas

Condensate

(Mcf)

(Bbls)

(Mcf)

(Bbls)

Production

Subject Interests

6,410,955

13,935

5,786,304

14,195

Royalty

2,643,866

9,266

946,233

6,245

Average Price (per Mcf/Bbl)

$2.74

$58.92

$1.46

$28.09

The Trust recognizes production during the month in which the related net proceeds attributable to the Royalty are paid to the Trust. Royalty income for a calendar year is based on the actual natural gas and oil production during the period beginning with November of the preceding calendar year through October of the current calendar year. Sales volumes attributable to the Royalty are determined by dividing the net profits by the Trust from the sale of oil and natural gas, respectively, by the prices received for sales of such volumes from the Subject Interests, taking into consideration production taxes attributable to the Subject Interests. Because the oil and natural gas sales attributable to the Royalty are based upon an allocation formula dependent on such factors as price and cost, including Hilcorp's capital expenditures and the timing of Hilcorp's true-ups of prior reported estimated oil and natural gas production data, the aggregate sales amounts from the Subject Interests may not provide a meaningful comparison to sales attributable to the Royalty. Future true-ups will impact future royalty proceeds but will not change the reported amounts due to the accounting basis used.

The Trust continues to request periodic updates from Hilcorp as to its production and financial expectations with respect to the Subject Interests due to any effects caused by the ongoing Covid-19 pandemic and the recent fluctuations in oil and gas pricing. Hilcorp has informed the Trust that, given the current natural gas pricing environment, Hilcorp does not anticipate materially reducing any of the Subject Interests' production or taking any of the Subject Interests' wells offline; however, both the Trust and Hilcorp continue to monitor the impact that Covid-19 may have on production, including as it relates to personnel availability in New Mexico and other Subject Interest areas. Hilcorp further informed the Trust that Covid-19 has not had, nor does it anticipate that Covid-19 will have any material impact on its operation of the Subject Interests or on its payments of Royalty income to the Trust. However, the continuing impact of the ongoing Covid-19 pandemic, including additional surges or variants and required or recommended pandemic mitigation efforts, on Hilcorp and the Subject Interests remains unknown, and any such impact could result in actual results being different from Hilcorp's expectations, despite the lack of a materially adverse impact to-date of the pandemic.

Included in this Report are the Condensed Statements of Assets, Liabilities and Trust Corpus as of September 30, 2021, (Unaudited), and December 31, 2020, and the Condensed Statements of Distributable Income and of Changes in Trust Corpus for the three months ended September 30, 2021 and 2020. (Unaudited).

Unit Holders of record will continue to receive an annual individualized tax information letter. All Unit Holders may obtain monthly tax information from the Trust's website at www.sjbrt.com, or from the Trustee upon request by calling toll-free or writing the Trustee at the contact information at the bottom of this Report.

Income and expense (per Unit) and depletion factors for the three months ended September 30, 2021 are as follows:

July

August

September

Gross Income

$ 0.096533

$ 0.000000

$ 0.047497

Interest Income

$ 0.000001

$ 0.000001

$ 0.000002

Severance Tax

($ 0.009568)

($ 0.000000)

($ 0.006230)

Administration Expense

($ 0.002226)

($ 0.003223)

($ 0.002831)

Distributable Income

$ 0.084740

$ 0.000000

$ 0.036995

Percentage Depletion Factor

0.014480

0.000000

0.007125

Cost Depletion Factor

0.058071

0.000000

0.023407

PNC Bank, National Association, Trustee

BY: JAMES R. WILHARM

Senior Vice President

Director of Trust Real Estate Services

CONDENSED STATEMENTS OF ASSETS,

LIABILITIES AND TRUST CORPUS

September 30,2021

December 31,2020

(Unaudited)

(Audited)

Assets

Cash and Short-Term Investments

$

2,724,289

$

1,286,468

Net Overriding Royalty Interest in Producing Oil and Gas Properties

(net of accumulated amortization of $129,246,192 and $128,151,694

at September 30, 2021 and December 31, 2020, respectively)

4,029,336

5,123,834

$

6,753,625

$

6,410,302

Liabilities And Trust Corpus

Distribution Payable to Unit Holders

$

1,724,289

$

286,468

Cash Reserves

1,000,000

1,000,000

Trust Corpus - 46,608,796 Units of Beneficial Interest Authorized

and Outstanding

4,029,336

5,123,834

$

6,753,625

$

6,410,302

CONDENSED STATEMENTS OF DISTRIBUTABLE

INCOME (UNAUDITED)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Royalty Income

$

6,059,606

$

-

$

21,837,483

$

6,039,129

Interest Income

237

396

1,006

6,010

Total Income

6,059,843

396

21,838,489

6,045,139

General and Administrative Expenses

(385,910)

(290,344)

(1,247,306)

(1,238,724)

Decrease in Cash Reserves

-

289,948

-

397,090

Distributable Income

$

5,673,933

$

-

$

20,591,183

$

5,203,505

Distributable Income per Unit (46,608,796 Units)

$

0.121735

$

0.000000

$

0.441787

$

0.111642

CONDENSED STATEMENTS OF CHANGES IN

TRUST CORPUS (UNAUDITED)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Trust Corpus, Beginning of Period

$

4,385,805

$

5,172,070

$

5,123,834

$

5,452,207

Amortization of Net Overriding Royalty Interest

(356,469)

-

(1,094,498)

(280,137)

Distributable Income

5,673,933

-

20,591,183

5,203,505

Distributions Declared

(5,673,933)

-

(20,591,183)

(5,203,505)

Trust Corpus, End of Period

$

4,029,336

$

5,172,070

$

4,029,336

$

5,172,070

Distributions Declared (Per Unit)

$

0.121735

$

0.000000

$

0.441787

$

0.111642

These Condensed Financial Statements and the other information presented in this Report should be read in conjunction with the information in the Trust's Quarterly Report on Form 10-Q (including but not limited to the Condensed Financial Statements and notes thereto) for the quarterly period ending September 30, 2021, as filed with the U.S. Securities and Exchange Commission on November 15, 2021.

MONTEZUMA

LA PLATA

ARCHULETA

DURANGO

FARMINGTON

NEW MEXICO

RIO ARIBA

SAN JUAN

McKINLEY

SANDOVAL

SAN JUAN BASIN

SAN JUAN BASIN

OIL FIELDS

GAS FIELDS

LEASEHOLD ACREAGE

Except for historical information contained in this Report, the statements in this Report may contain or include 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 "may," "will," "estimate," "anticipate," "should," "plan," "intend," or other words that convey the uncertainty of future events or outcomes. Forward-looking statements and the financial 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, volatility of oil and gas prices, governmental regulation or action, litigation, uncertainties about estimates of reserves, capital expenditures, drilling activity, development activities, production efforts and volumes, and the results of the Trust's activities. Such statements are based on certain assumptions of PNC Bank, NA, the Trustee and by Hilcorp, the owner of the working interest through the reporting period, with respect to future events; are based on an assessment of, and are subject to, a variety of factors deemed relevant by the Trustee and Hilcorp; and involve risks and uncertainties. However, whether actual results and developments will conform with such expectations and predictions is subject to a number of risks and uncertainties which could affect the future results of the energy industry in general, and the Trust and Hilcorp in particular, and could cause those results to differ materially from those expressed in such forward-looking statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on Hilcorp's business and the Trust. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in such forward- looking statements. The Trust undertakes no obligation to publicly update or revise any forward-looking statements, except as required by applicable law

SAN JUAN BASIN ROYALT Y TRUST

PAYING AGENT / TR ANSFER AGENT / REGISTR AR

PNC Bank, National Association, Trustee

Computershare Investor Services

2200 Post Oak Blvd, Floor 18

www.computershare.com

Houston, Texas 77056

Customer Service: (312) 360-5154

Toll-free telephone: (866) 809-4553

Outside U.S. telephone: (904) 230-3401

www.sjbrt.com

sjt@pnc.com

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San Juan Basin Royalty Trust published this content on 20 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 November 2021 02:33:05 UTC.