FORT WORTH, Texas--(BUSINESS WIRE)--
The San Juan Basin Royalty Trust (SJT) (the "Trust") announced today that the operator of the Trust's Subject Interests, Hilcorp San Juan L.P. (“Hilcorp”), has provided the Trust with Hilcorp's capital project plan for 2019 (the “2019 Plan”). Hilcorp has estimated that its 2019 capital expenditures for properties subject to the Trust’s royalty interest to be $2,653,000.
The principal asset of the Trust is a 75% net overriding royalty interest carved out of certain oil and gas leasehold and royalty interests in properties owned by Hilcorp (the “Subject Interests”) located in the San Juan Basin, and more particularly in San Juan, Rio Arriba and Sandoval counties of northwestern New Mexico. The Trust relies upon Hilcorp's estimates of its capital expenditures in calculating the Trust's distributable income to its unit holders.
Hilcorp informed the Trust that its 2019 Plan for the Subject Interests includes six capital projects. Hilcorp further detailed to the Trust that it has allocated approximately $728,000 of the 2019 Plan's budget towards five well recompletions scheduled to be completed in the Mesaverde and Fruitland Coal formations, and an additional approximately $1,925,000 of the 2019 Plan's budget towards one horizontal well to be drilled in the Mancos formation. Hilcorp will be the operator of all the projects included in the 2019 Plan, and has further informed the Trust that its planned project status for 2019 is fluid and that additional projects may be added. Due to this fluidity in the 2019 Plan, Hilcorp has advised the Trust that actual capital costs may vary from these estimates.
Capital expenditures by Hilcorp of approximately $2.4 million were included in calculating the royalty income paid to the Trust during calendar year 2018. In 2018, Hilcorp allocated approximately $2.0 million of the capital expenditures towards 15 well recompletions and an additional approximately $0.4 million towards six facility projects.
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,” "subject to," 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.