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san juan basin royalty trust unveils lucrative may payout for unit holders 27

Finance

San Juan Basin Royalty Trust Unveils Lucrative May Payout for Unit Holders

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Leo Gonzalez

April 19, 2024 - 13:15 pm

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Argent Trust Company Announces Substantial Distribution for San Juan Basin Royalty Trust Unit Holders

DALLAS, April 19, 2024 – The trustee of the San Juan Basin Royalty Trust, Argent Trust Company, has proudly declared a robust monthly cash distribution for the benefit of its unit holders. Set against the backdrop of productive activities during February 2024, the distribution is a direct reflection of the earnings accrued from the Trust's interests. Unit holders can look forward to receiving their share of the profits on May 14, 2024, as long as they are recorded on the books as Unit Holders by April 30, 2024.

The precise figure earmarked for distribution in May stands at $1,065,685.42, which translates to approximately $0.022864 per unit of beneficial interest. This sum originates chiefly from the production achievements of the prior month, showcasing a tangible reward for those invested in the Trust's endeavors.

A Breakdown of Earnings and Expenses

The partnership responsible for the stewardship of the Trust's subject interests, Hilcorp San Juan L.P., and its operational arm, Hilcorp Energy Company, jointly relayed to the Trust that the net profits recorded for the month of February 2024 amounted to $2,473,219 in gross earnings, yielding a net royalty sum to the Trust of $1,854,914.

During the same period, Hilcorp also reported a total revenue north of $5.6 million from the relevant interests. Upon closer examination, this revenue comprised predominantly of significant gas revenue, which stood at over $5.3 million, complimented by oil revenues amounting to roughly $75,000. The production costs associated with these earnings were considerable, citing more than $3 million in February alone. These costs were detailed to include lease operating expenses, severance taxes, and a portion designated for capital costs.

Internal Dynamics of Gas Production

Citing the specifics of production, Hilcorp's reporting denoted that February's gas volumes reached an impressive over 1.7 million Mcf (1.95 million MMBtu). This production level saw a slight reduction from January's volumes. The average gas price showed a modest decrease, going from $3.64 per Mcf ($3.28 per MMBtu) in January to $3.06 per Mcf ($2.75 per MMBtu) in February, painting a picture of slight fluctuations in the market rates for gas.

Proactive Financial Management: Boosting Cash Reserves

A crucial aspect of the Trust's financial prudence is evident in the Trustee's management of cash reserves. This discretionary action ensures the Trust is well-equipped to handle any contingent liabilities or unanticipated expenses in the future. Traditionally, the cash reserve has been maintained at the $1 million mark. However, recognizing the potential for revenue shortfalls, Argent Trust Company has chosen a proactive route by deciding to bolster the reserve funds incrementally.

In March 2024, $400,000 was earmarked as reserve funds from the royalty income. A similar amount has also been planned for reservation from April's income. These steps are aimed at raising the cash reserve fund to an enhanced total of $2 million. When April's reservation is complete, the Trust will be well-positioned with $1.8 million in protected reserves, signifying a strategic financial move for uncertain times ahead.

Ensuring Compliance and Transparency in Operations

The Trust employs a rigorous auditing process to maintain transparency and accountability in its financial operations. The operators of the Trust's interests, under supervision, enter into agreements that enable the sale of the gathered and processed production at market-sensitive prices. Advised by the Trust's consultant and validated by the trustee, these protocols ensure fair dealings in the marketplace.

Furthermore, the Trust is actively involved in discussions with Hilcorp to ensure accuracy and compliance in their reporting and accounting to the Trust. The due diligence extends to audits of payments made to the Trust by Hilcorp, encompassing a spectrum of financial activity from revenues and production costs to adjustments and recoupments. An in-depth analysis of pricing and rates further solidifies the Trust's commitment to oversight and adherence to its financial protocols.

San Juan Basin Royalty Trust's Forward-Planning Approach

The San Juan Basin Royalty Trust, true to an ethos of forward-thinking, disseminates forward-looking statements aside from historical data. These statements, made according to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, come with an inherent uncertainty of future events or outcomes. Accompanied by terminology suggesting estimations and anticipations, such prognoses predict the Trust’s ventures in a fluctuating oil and gas market.

Numerous variables may lead to outcomes differing from projected statements, with factors such as Hilcorp's reported evaluations, oscillations in oil and gas prices, possible governmental regulations, and litigation presenting potential hurdles. In addition, the actual reserves' estimates could bring a variance in the results. Acknowledging these uncertainties, the Trust remains steadfast in its periodic reviews and filings with the Securities and Exchange Commission, communicating all relevant risks to its stakeholders.

Open Channels of Communication

San Juan Basin Royalty Trust ensures open communication lines for queries and insights pertaining to trust services. Connect with Nancy Willis, the Director of Royalty Trust Services through various available communication means, from toll-free numbers to fax services. Interested parties are encouraged to explore the Trust's official website www.sjbrt.com for wholesome information or reach out via email for a more direct interaction.

The royalty trust maintains its strong commitment to transparency and engagement, providing stakeholders with a comprehensive means to acquire assistance and information regarding their investments.

A Future Characterized by Diligence and Prosperity

In summary, the financial proceedings of the San Juan Basin Royalty Trust for the month of February 2024 have culminated in the declaration of a distribution, cementing the success of the production month in concrete financial terms. The beneficiary unit holders stand to reap the rewards of diligent operations and effective financial management. As the oil and gas sector continues to face variability in prices and market conditions, the Trust's proactive approach toward reserve funds emphasizes strategic financial stability.

The Secretariat of the Trust ensures a structured approach toward financial auditing and compliance, safeguarding the interests of all parties involved. With an eye on the future, the Trust aligns itself with contemporary best practices, employing a vigilant stance against unpredictability in the natural resources domain. By constantly evaluating and auditing its activities and maintaining transparent communication with its unit holders, the San Juan Basin Royalty Trust articulates a clear vision of disciplined prosperity for the times ahead, setting a robust example in trust management and investment protection.

The Commitment to Upholding Trust and Integrity

It is crystal clear that the San Juan Basin Royalty Trust, by orchestrating a comprehensive audit process and striving for financial clarity, highlights its enduring commitment to upholding trust and integrity. Its involvement with the steering forces, such as Hilcorp, not only ensures fidelity in the numbers reported but also paves the way for a meticulous adherence to all the covenants of the underlying operative Trust agreements. This fastidious attention to detail and the unwavering pursuit of potentials for remedy, should discrepancies arise, solidify the cornerstone upon which the Trust operates. It stands as a testament to its dedication to serve the best interests of its unit holders.

Closing Reflections: The Trust's Assurances Amidst Challenges

The assurance given by the Trust to its unit holders, despite facing the inherent challenges of an unpredictable oil and gas market, illustrates the resoluteness of its forward-looking stance. With an optimistic view anchored in reality, the San Juan Basin Royalty Trust lays out a path marked by dynamic response to shifts in prices, legislative changes, and other forms of uncertainties that punctuate the sector. The unwavering commitment to navigate through these challenges and emerge with practical strategies fortifies the Trust's stature in the industry while protecting and maximizing its unit holders' investments.

Contact Information

For further details, inquiries, or to engage with San Juan Basin Royalty Trust, the Trust invites you to reach out through the provided contact channels:

  • Nancy Willis, Director of Royalty Trust Services
  • Toll-free: (855) 588-7839 or (866) 809-4553
  • Fax: (214) 559-7010
  • Official Trust Website: San Juan Basin Royalty Trust
  • Email: [email protected]

These channels stand as bridges between the Trust and its stakeholders, emphasizing the importance of seamless communication and accessibility for sustained relations and trust services.

Source Credential

This news release has been brought to you by the San Juan Basin Royalty Trust. It encapsulates the financial events of the previous month and provides a detailed projection of the Trust's financial landscape. The Trust looks forward to continuing its duty of providing transparent information and robust returns to its esteemed unit holders.

Adhering to the principles of transparency and accountability while focusing on delivering fruitful outcomes for its unit holders, the San Juan Basin Royalty Trust appears to remain a pivotal entity in the dynamic landscape of energy production royalties.

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