San Juan Basin Royalty Trust Reports Q2 Loss, Excess Production Costs Rise to $9.3M
SJT sits 17% above its 52-week low of $2.37.
Summary
San Juan Basin Royalty Trust's Q2 2026 10-Q shows Excess Production Costs rising to $9.26 million, cash reserves nearly depleted at $4,019, and a growing line of credit balance of $944,471, with no royalty income received since May 2024.
Key Events · Earnings and Guidance · SJT
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Excess Production Costs Rise to $9.26M
Cumulative Excess Production Costs increased to $9,258,749 gross ($6,944,062 net to the Trust) as of June 30, 2026, up $3,071,930 gross ($2,303,948 net) from March 31, 2026, driven by lease operating expenses and capital expenditures exceeding gross proceeds.
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Cash Reserves Nearly Depleted
Cash reserves fell to $4,019 as of June 30, 2026, from $23,298 at December 31, 2025, as the Trust used reserves to pay interest on its line of credit and administrative expenses.
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Line of Credit Balance Grows
The outstanding balance on the Trust's $2 million line of credit with Texas Bank increased to $944,471 as of June 30, 2026, from $387,808 at year-end 2025, with interest-only payments due until maturity on May 21, 2027.
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Negative Prior Period Adjustment
Hilcorp applied a negative prior period adjustment of ($3,472,228) gross (($2,604,171) net to the Trust) for 2017-2020, which the Trust's joint interest auditors are reviewing; this reduces future distributable income.
Analysis · SJT · Energy & Transportation
The Trust's Q2 2026 10-Q confirms a deteriorating financial position: Excess Production Costs climbed to $9.26 million gross ($6.94 million net to the Trust), up $3.07 million from Q1, while cash reserves fell to just $4,019 and the line of credit balance rose to $944,471. The Trust has received no royalty income since May 2024, and the going concern warning remains. The negative prior period adjustment of $3.47 million gross from Hilcorp's 2017-2020 audit further reduces future distributable income. With no distributions expected until the deficit is cleared, liabilities paid, and reserves replenished, unitholders face continued zero payouts and potential further borrowing.
At the time of this filing, SJT was trading at $2.77 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $129.1M. The 52-week trading range was $2.37 to $6.61. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.