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San Juan Basin Royalty Trust (SJT) Stock Dips Significantly Ahead of June 2021 Cash Distribution

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San Juan Basin Royalty Trust (SJT) stock prices were down by a concerning 15.38% shortly after market trading commenced on June 18th, 2021, bringing the price per share up to USD$4.72 early on in the trading day.

June 2021 Cash Distribution

The company announced on June 18th, 2021 that it had declared a monthly cash distribution of a total of USD$821,024.63 to holders of its units of beneficial interest. This comes out to USD$0.017615 per unit, derived mainly from estimated production during April 2021, subject to various adjustments by the owner of the Trust’s subject interests for prior months. The distribution will be applicable to unit holders of record as of June 30th, 2021, with the payout scheduled for July 15th, 2021.

Comparative Reports

As per information provided to the company by Hilcorp, April 2021 saw gas production for the subject interests coming out to a total of 2,498,553 Mcf, up from the 2,617,042 Mcf reported for the month of March in 2021. Average gas prices for April 2021 were calculated by dividing revenues by production volume, with a final figure of USD$1.67 per Mcf. This is comparable to an average gas price of USD$2.07 per Mcf for March 2021.

April 2021 Breakdown

Because of the company’s transition to a new accounting system, Hilcorp informed SJT that April 2021 would have a monthly report based on estimated production, estimated prices, and estimated costs. Revenue for the reporting month of April 2021 included an estimated USD$100,000 for non-operated revenue. Capital costs for the month of April 2021 came out to USD$11,623 as per Hilcorp reports to the trust. Lease operating expenses and property taxes were reported at USD$2,459,029, while severance taxes came in at USD$780,743.

Capital Project Plan

The company announced near the end of February that Hilcorp had provided the company with a capital project plan for the fiscal year 2021, which expected capital expenditures amounting to USD$0.3 million. The principal asset of the Trust is comprised of a 75% et overriding royalty interest that is derived from certain oil and gas leasehold and royalty interests in properties owned by Hilcorp. These interests stem from properties owned by Hilcorp in the San Juan Basin.

Future Outlook for SJT

Armed with a new accounting system, SJT is poised to capitalize on the opportunities afforded to it. The company is keen to bounce back from the dip in equity value following the cash distribution for June 2021. Current and potential investors are hopeful that management will continue to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.

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