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Yahoo
9 hours ago
- Business
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San Juan Basin Royalty Trust Declares No Cash Distribution for June 2025
DALLAS, June 20, 2025 /PRNewswire/ -- Argent Trust Company, as the trustee (the "Trustee") of the San Juan Basin Royalty Trust (the "Trust") (NYSE: SJT), today reported that it will not declare a monthly cash distribution to the holders of its Units of beneficial interest (the "Unit Holders") due to the application of net proceeds of $294,238, which amount would otherwise be payable to the Trust as royalty income, to the balance of excess production costs accrued as a result of Hilcorp San Juan L.P.'s ("Hilcorp") drilling of two new horizonal wells in 2024. Excess production costs occur when production costs and capital expenditures exceed the gross proceeds for a certain period. The balance of cumulative excess production costs is currently approximately $14,767,940 gross ($11,075,955 net to the Trust), a decrease in the deficit of $392,317 gross ($294,238 net to the trust) from last month's reporting period. Hilcorp will continue to charge the balance of excess production costs to the Trust's net proceeds each month. Until the balance is paid in full, the Trust will not receive royalty income as all net proceeds will be applied to the balance of excess production costs. No cash distributions will be made by the Trust until future net proceeds are sufficient to pay Trust liabilities and replenish cash reserves. Hilcorp reported $4,558,987 of total revenue from the Subject Interests for the production month of April 2025, consisting of $4,403,222 of gas revenues and $155,765 of oil revenues. For the Subject Interests, Hilcorp reported $4,201,917 of production costs (excluding the balance of excess production costs) for the production month of April 2025, consisting of $2,510,928 of lease operating expenses, $568,685 of severance taxes, and $1,122,304 of capital costs. Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for April 2025 totaled 2,349,703 Mcf (2,610,782 MMBtu), as compared to 2,448,569 Mcf (2,720,632 MMBtu) for March 2025. Dividing gas revenues by production volume yielded an average gas price for April 2025 of $1.87 per Mcf ($1.69 per MMBtu), a decrease of $0.95 per Mcf ($0.85 per MMBtu) as compared to the average gas price for March 2025 of $2.82 per Mcf ($2.54 per MMBtu). This month's Trust administrative expenses totaled $135,339. The increase in administrative expenses was attributable to differences in timing of the receipt and payment of certain expenses by the Trust. Interest income received by the Trust in the amount of $394 will be applied to cover a portion of this month's Trust administrative expenses. Pursuant to the Amended and Restated Royalty Trust Indenture, dated December 12, 2007 (as amended on February 15, 2024, by the First Amendment to the Amended and Restated Royalty Trust Indenture), the Trustee is authorized to retain, in its sole discretion, a cash reserve for payment of Trust liabilities that are contingent or uncertain or otherwise not currently due and payable. To cover Trust expenses during any period of revenue shortfall, which has resulted and may continue to result from lower commodity prices and increased capital expenditures and lease operating expenses under Hilcorp's 2024 capital project plan for the Subject Interests, the Trustee increased the cash reserves in March and April of 2024, such that total cash reserves were $1.8 million as of April 30, 2024. Interest income and cash reserves were utilized to pay Trust administrative expenses each month from May 2024 through May of 2025. As of May 31, 2025, the balance of cash reserves maintained by the Trustee was $32,959. On May 21, 2025, the Trust entered into a promissory note (the "Note") to establish a line of credit (the "Line of Credit") in the amount of $2,000,000 with Texas Bank, together with a mortgage to secure that Note. The Line of Credit is intended to cover the Trust's administrative expenses until the Trust receives royalty income in amounts sufficient to (a) repay the balance of excess production costs accrued as a result of Hilcorp San Juan L.P.'s drilling of two new horizonal wells in 2024, (b) replenish a reserve in the amount of $2,000,000, and (c) repay the principal due under the Note, after which time, the Trust will resume distributions of the net profits income to the holders of the Trust's units of beneficial interest. On June 18, 2025, cash reserves in the amount of $212 were utilized to pay interest accrued on the Line of Credit, such that the balance of cash reserves maintained by the trust is $32,747. Interest income in the amount of $394, a draw of $132,851 from the Trust's Line of Credit at Texas Bank, and $1883 of cash reserves remaining from an over withdrawal of funds from the reserves in April 2025 will be used to pay Trust administrative expenses for the month of June. Production from the Subject Interests continues to be gathered, processed, and sold under market sensitive and customary agreements, as recommended for approval by the Trust's Consultant. 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 payments made by Hilcorp to the Trust, inclusive of sales revenues, production costs, capital expenditures, adjustments, actualizations, and recoupments. The Trust's auditing process has also included detailed analysis of Hilcorp's pricing and rates charged. As previously disclosed in the Trust's filings, these revenues and costs (along with all costs) are the subject of the Trust's ongoing comprehensive audit process by the Trust's professional consultants and outside counsel to analyze compliance with all the underlying operative Trust agreements and evaluate potential remedies in the event there is suspected non-compliance. As of July 21, 2025, the Trust will self-publish press releases on its website, and the release will not be included in any wire distribution, which has been the normal procedure for each monthly press release through June 20, 2025. The self-publication is due to the depletion of the Trust's cash reserves and conservation of the line of credit resources. The trust will self-publish press releases until such time as the cash reserves have been replenished and increased to $2.0 million. The Trust will continue to furnish unitholders with information through its website and Form 8-K filings with the Securities and Exchange Commission, which are available at Forward Looking Statements. 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. Contact: San Juan Basin Royalty Trust Argent Trust Company, Trustee Nancy Willis, Director of Royalty Trust Services Toll-free: (855) 588-7839 Fax: (214) 559-7010 Website: Email: trustee@ View original content: SOURCE San Juan Basin Royalty Trust Inicia sesión para acceder a tu portafolio
Yahoo
09-06-2025
- Business
- Yahoo
Amid gas crunch, Alaska could revoke leases from a company whose drilling has stalled
Natural gas production from offshore platforms in Cook Inlet, outside of Anchorage, has declined over the past several decades. The area's dominant producer, Hilcorp, has warned electric and heating utilities that they should not expect their supply contracts to be renewed when existing ones expire. (Nathaniel Herz/Northern Journal) Gov. Mike Dunleavy's administration is threatening to strip a company of oil and gas leases in Cook Inlet outside Anchorage, saying it's sitting on deposits that could delay an impending shortage of gas needed for heating and power generation in urban Alaska. The Alaska Department of Natural Resources recently placed in 'default' the Cosmopolitan Unit, a block leased by Texas-based BlueCrest Energy, saying it hasn't met commitments to drill. The company has held leases at Cosmopolitan for more than a decade. It conducted initial drilling several years ago but has not drilled any new wells since 2019, according to state records. Company executives say that BlueCrest experienced a cash crunch when, amid a budget crisis beginning in 2014, the state of Alaska chose not to pay tax credits to oil firms that had spent money on drilling. BlueCrest has also had to ask Alaska's economic development agency to approve delays in paying back a $30 million state loan. The state's new notice to BlueCrest, signed in May by Commissioner John Boyle, gives the company until Aug. 21 to show proof that it's secured investment to drill a $55 million new oil well, as well as to advance development of a new offshore platform that would target natural gas. That platform could cost $350 million or more, according to BlueCrest officials. 'We want to see aggressive, defined momentum towards putting our resources into active production,' Boyle said in an interview Thursday. 'We need to see some drilling. We need to see some action.' BlueCrest is negotiating with multiple companies about potential investment, Benjy Johnson, its chief executive, said in a phone interview. 'We're hopeful that we'll get it done,' he said. 'I think we will.' Johnson said he understands the state's perspective, but added that defaulting BlueCrest's leases is 'not the solution to the problem.' 'The solution to the problem is helping us get funding to drill these wells, and to get the gas development going,' he said. BlueCrest is one of the smaller companies active in the Cook Inlet basin, where the vast majority of the gas is produced by a large independent oil business, Hilcorp. Hilcorp has warned urban Alaska's heating and electric utilities that they shouldn't expect Hilcorp to renew their gas supply contracts when they expire in the coming years. In response, those utilities are advancing plans to import liquefied natural gas — but they also say that new local gas production could delay the need for imports. The supply crunch is serious enough that utilities and regulators have recently been discussing contingency plans for rolling blackouts. BlueCrest says its leases contain large 'proved reserves' of gas — an industry term meaning that a deposit's flow has been tested and that an engineering firm has validated it can be produced with 90% probability or higher. But building an offshore platform to access the gas would cost some $350 million. One of the other small companies operating in Cook Inlet, HEX, has moved ahead with gas drilling in each of the past two years — with help from a decision by Dunleavy's administration to reduce the royalty payments due from HEX to the state. Boyle, the natural resources commissioner, described the royalty reduction as a 'carrot.' 'But there's also the potential for sticks, if we don't see active movement on developing the rest of (HEX's) leased acreage,' Boyle said. 'And the same for BlueCrest and anyone else that we don't feel is fulfilling their obligations.' The state has a range of options if BlueCrest doesn't advance its drilling program, Boyle said. In his notice to the company, he wrote that his agency could shrink BlueCrest's Cosmopolitan Unit, or 'terminate' it. If the state takes back some of BlueCrest's leased acreage, Boyle said, there are 'definitely companies and entities that are willing to put money there to bring that gas to market.' BlueCrest could also decide to sell its leases to another company, or find a business partner that could help advance development, according to Boyle. BlueCrest and Hilcorp previously discussed a partnership to develop the Cosmopolitan Unit's gas, Northern Journal reported in 2023. But the discussions broke down because the two companies couldn't agree on how to divide potential costs and profits. Nathaniel Herz welcomes tips at natherz@ or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.
Yahoo
19-05-2025
- Business
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San Juan Basin Royalty Trust Declares No Cash Distribution for May 2025
DALLAS, May 19, 2025 /PRNewswire/ -- Argent Trust Company, as the trustee (the "Trustee") of the San Juan Basin Royalty Trust (the "Trust") (NYSE: SJT), today reported that it will not declare a monthly cash distribution to the holders of its Units of beneficial interest (the "Unit Holders") due to the application of net proceeds of $1,499,498, which amount would otherwise be payable to the Trust as royalty income, to the balance of excess production costs accrued as a result of Hilcorp San Juan L.P.'s ("Hilcorp") drilling of two new horizonal wells in 2024. Excess production costs occur when production costs and capital expenditures exceed the gross proceeds for a certain period. The balance of cumulative excess production costs is currently approximately $15,160,257 gross ($11,370,193 net to the Trust), a decrease in the deficit of $1,999,331 gross ($1,499,498 net to the trust) from last month's reporting period. Hilcorp will continue to charge the balance of excess production costs to the Trust's net proceeds each month. Until the balance is paid in full, the Trust will not receive royalty income as all net proceeds will be applied to the balance of excess production costs. No cash distributions will be made by the Trust until future net proceeds are sufficient to pay Trust liabilities and replenish cash reserves. Hilcorp reported $6,984,564 of total revenue from the Subject Interests for the production month of March 2025, consisting of $6,904,591 of gas revenues and $79,973 of oil revenues. For the Subject Interests, Hilcorp reported $4,985,233 of production costs (excluding the balance of excess production costs) for the production month of March 2025, consisting of $3,193,460 of lease operating expenses, $786,589 of severance taxes, and $1,005,184 of capital costs. This month's Trust administrative expenses totaled $85,694. The decrease in administrative expenses was attributable to differences in timing of the receipt and payment of certain expenses by the Trust. Interest income received by the Trust in the amount of $856 will be applied to cover a portion of this month's Trust administrative expenses, with cash reserves utilized to pay the remaining administrative expenses. Based upon information provided to the Trust by Hilcorp, gas volumes for the Subject Interests for March 2025 totaled 2,448,569 Mcf (2,720,632 MMBtu), as compared to 2,287,310 Mcf (2,541,456 MMBtu) for February 2025. Dividing gas revenues by production volume yielded an average gas price for March 2025 of $2.82 per Mcf ($2.54 per MMBtu), a decrease of $0.54 per Mcf ($0.48 per MMBtu) as compared to the average gas price for February 2025 of $3.36 per Mcf ($3.02) per MMBtu. Pursuant to the Amended and Restated Royalty Trust Indenture, dated December 12, 2007 (as amended on February 15, 2024, by the First Amendment to the Amended and Restated Royalty Trust Indenture), the Trustee is authorized to retain, in its sole discretion, a cash reserve for payment of Trust liabilities that are contingent or uncertain or otherwise not currently due and payable. To cover Trust expenses during any period of revenue shortfall, which has resulted and may continue to result from lower commodity prices and increased capital expenditures and lease operating expenses under Hilcorp's 2024 capital project plan for the Subject Interests, the Trustee increased the cash reserves in March and April of 2024, such that total cash reserves were $1.8 million as of April 30, 2024. Interest income and cash reserves were utilized to pay Trust administrative expenses each month from May 2024 through April of 2025. This month, cash reserves in the amount of $84,838 will be utilized to cover the balance of Trust administrative expenses which will bring the balance of cash reserves maintained by the Trustee to $32,959. Prior to any future distributions to Unit Holders, the Trustee plans to replenish the cash reserves and continue to increase the cash reserves to $2.0 million. The Trustee is currently evaluating credit options on behalf of the Trust, the funds from which would be utilized to pay the Trust's administrative expenses until such time as the excess production costs are repaid and the Trust begins receiving royalty income again. Production from the Subject Interests continues to be gathered, processed, and sold under market sensitive and customary agreements, as recommended for approval by the Trust's Consultant. 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 payments made by Hilcorp to the Trust, inclusive of sales revenues, production costs, capital expenditures, adjustments, actualizations, and recoupments. The Trust's auditing process has also included detailed analysis of Hilcorp's pricing and rates charged. As previously disclosed in the Trust's filings, these revenues and costs (along with all costs) are the subject of the Trust's ongoing comprehensive audit process by the Trust's professional consultants and outside counsel to analyze compliance with all the underlying operative Trust agreements and evaluate potential remedies in the event there is suspected non-compliance. Forward Looking Statements. 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. Contact: San Juan Basin Royalty TrustArgent Trust Company, TrusteeNancy Willis, Director of Royalty Trust ServicesToll-free: (855) 588-7839Fax: (214) 559-7010Website: trustee@ View original content: SOURCE San Juan Basin Royalty Trust Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
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Hilcorp already owns most Cook Inlet oil and gas. It just bought out another player.
A drilling rig at a different Hilcorp gas producing property, the Ivan River unit. (Photo by Nathaniel Herz/Northern Journal) Hilcorp has bought out one of the last small independent natural gas operators in the Cook Inlet basin outside of Anchorage — furthering consolidation among the companies that supply urban Alaska with the fuel needed for home heating and electricity generation. Subsidiaries of Gardes Holdings, a Louisiana-based oil business, had operated the North Fork unit on the Kenai Peninsula — a small development that produces some 2 million cubic feet of gas a day, or a little more than 1% of the demand of Enstar, urban Alaska's fuel supplier. Gardes had said it was struggling to raise money to drill new wells, and its subsidiary, Vision Resources, sold its leases to Hilcorp in a transaction approved last week, according to documents posted by the Alaska Division of Oil and Gas. Hilcorp affiliates have also acquired a 7-mile pipeline associated with the North Fork unit. A Gardes official, Mark Landt, referred questions to Hilcorp. In a prepared statement, Hilcorp spokesman Matt Shuckerow said the company is looking to drill new wells as soon as this winter. 'Hilcorp is excited about the opportunity to further develop the North Fork Unit — a field that is largely undeveloped but shows potential for new production,' Shuckerow said. 'Hilcorp is optimistic about bringing additional natural gas to market to help meet the energy needs of Southcentral Alaska families, homes, and businesses.' Nathaniel Herz welcomes tips at natherz@ or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-05-2025
- General
- Yahoo
Diesel spill along the Yukon raises fears about drilling
Nathaniel HerzNorthern Journal A 1,000-gallon diesel spill earlier this month near the Yukon River has prompted renewed objections to plans by a privately held oil company to drill in the region later this year. The truck was operated not by Hilcorp, the oil company, but by Brice Inc., a Native-owned construction firm that has worked with Hilcorp on its preparations for the summer drilling efforts in the remote Yukon Flats basin, north of Fairbanks. Hilcorp is staging equipment for the drilling program at the Yukon River Camp, where the Dalton Highway, which connects urban Alaska to the North Slope oil fields, crosses the Yukon River. Once the ice on the river clears, the equipment will be barged up the Yukon toward drill sites. Thom Leonard, a spokesman for Brice's parent company, Calista, said Brice's truck was 'between jobs' when the spill occurred earlier this month at a parking lot at the camp, which is run by a Fairbanks-based tourism business on federal land. The lot is typically used for 'multi-day barging storage,' according to a post-spill report from Brice to regulators at the Alaska Department of Environmental Conservation, known as DEC. There's no indication that the fuel reached the Yukon itself, according to documents released by DEC. But critics of the drilling effort say the spill still serves as an example of the type of incidents that can happen during industrial operations like oil exploration. The spill left some 600 gallons of pooled fuel in the parking lot that had to be vacuumed up by another truck. A video of the site obtained by Northern Journal showed workers walking through an ankle-deep pool that one of them described as diesel. 'We were told over and over again that we were overhyping the danger, we were alarmist, and that everything they were doing is perfectly safe,' Rhonda Pitka, the chief of the tribal government in the Yukon River village of Beaver, said in a phone interview. 'It's so disappointing.' Oil companies often hire contractors to perform specialized tasks, and Brice affiliates have worked for Hilcorp in the past. Leonard, the spokesman for Brice's parent company, would not say whether the truck had originally been in the area supporting Hilcorp, adding that 'we don't typically comment on clients we serve.' A Hilcorp spokesman also declined to comment. But an online update last month from Doyon Ltd., the regional Native corporation that owns land in the Yukon Flats where the oil drilling will take place, noted that a crew from Brice was doing debris clearing for Hilcorp's exploration program. A Doyon official said the company is aware of a situation that was reported to DEC but referred questions to Hilcorp as the 'appropriate point of contact.' Hilcorp's search for oil in the Yukon Flats has support from Doyon and tribal leaders in Birch Creek, the Native village closest to where the summer drilling will take place. Other tribal leaders along the river and in Alaska's Interior have harshly criticized the exploration campaign, saying that its potential risks are incompatible with the region's salmon-dependent Native communities. While the spill took place April 6, according to documents released by DEC, drilling opponents only learned about it in recent days through word of mouth, according to Pitka. She described the incident as 'exactly what we were afraid of.' Opponents of the drilling program point to Hilcorp's history in Alaska: The company, which traditionally has acquired and operated aging oil and gas infrastructure, has been fined for numerous incidents, and regulators have pointed to a 'track record of regulatory noncompliance.' A DEC official involved in the spill response, Terra Meares, described Brice as the 'responsible party' for the spill and said that the purpose of the company's equipment at the Yukon camp is beyond her agency's jurisdiction. Decisions about potential penalties or enforcement actions, she added, would be made at higher levels of DEC. The director of the department's spill prevention and response division was out of the office this week and unavailable for comment. The truck was originally left at the parking lot April 4, 'with no indication of leaks or issues,' according to Brice's report to DEC. The spill was discovered early in the morning of April 6 by a camp resident who was watching the northern lights and saw or smelled fuel. The truck's tank holds 3,000 gallons, and the 600 gallons of 'pooled fuel' were ultimately vacuumed up from snow- and ice-covered ground by another truck that was dispatched to the site, according to documents released by DEC. An excavator subsequently arrived at the site to remove thicker layers of contaminated ice, according to the documents. Leonard, with Brice's parent company, said the businesses 'always strive to respect the environment.' 'We are Alaskans,' Leonard said in an email. 'It pains us when incidents like this occur, although we are proud our team members took immediate action and followed all regulatory requirements.'
