San Juan Basin Royalty Trust skips October 2026 payout over excess costs

what happened

San Juan Basin Royalty Trust will not declare a cash distribution for October 2026. According to TradingView, the reason is accumulated excess production costs of about 12,423,018 dollars gross, or 9,317,264 dollars net to the trust, together with low natural gas prices.

Hilcorp reported total revenue from the subject interests of 4,868,781 dollars for August 2026, of which 4,688,244 dollars came from gas. Production costs excluding the excess amounted to 4,738,333 dollars. The trustee said net proceeds will go toward repaying the excess costs, replenishing a 2,000,000 dollar reserve and repaying the line of credit. Distributions will resume only after that.

The trust's SEC filing carries the same decision and cites the same reasons.

why it matters

The story is niche, but it shows how low gas prices cut income for royalty holders. The average gas price in August was 2.28 dollars per Mcf, up 0.27 dollars from July, yet that is not enough to cover the accumulated costs. Until they are repaid, payouts to unit holders stay suspended.

market impact

Natural gas: low prices and accumulated excess costs delay payouts to trust unit holders

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