San Juan Basin Royalty Trust (SJT) Q3 2025 earnings summary

Executive summary

• No royalty income or distributable income was recorded for the three and nine months ended September 30, 2025, due to excess production costs and increased capital expenditures from drilling two new horizontal wells in 2024, with costs extending into 2025.

• The Trust relied on cash reserves and a newly established $2 million line of credit to cover administrative expenses, raising substantial doubt about its ability to continue as a going concern.

• No monthly cash distribution was declared for October 2025 due to continued excess production costs and low natural gas prices.

Financial highlights

• Gross proceeds from subject interests increased 62.1% for the quarter and 50.0% for the nine months year-over-year, driven by higher natural gas prices and production volumes from new wells.

• Capital expenditures decreased $6.95 million for the quarter but increased $7.79 million for the nine months, reflecting the timing of major projects.

• Severance taxes rose 48% for the quarter and 11.3% for the nine months, in line with higher gross proceeds.

• Lease operating expenses and property taxes increased 9.1% for the quarter and 5% for the nine months.

• As of September 30, 2025, cash reserves were $29,160 and the outstanding line of credit balance was $274,135.

Outlook and guidance

• Distributions to unitholders will not resume until excess production costs are fully recovered, the $2 million cash reserve is replenished, and the line of credit is repaid.

• Hilcorp's 2025 capital plan includes $9 million in projects, with $7.7 million spent as of September 30, 2025; actual costs may vary.