FORT WORTH, Texas--(BUSINESS WIRE)--The San Juan Basin Royalty Trust (NYSE:SJT) (the "Trust") announced today the capital project plan for 2018 (the “2018 Plan”) as delivered to it by Hilcorp San Juan L.P. (“Hilcorp”). Capital expenditures for 2018 for properties subject to the Trust’s royalty interest are estimated to be $547,800.
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. Hilcorp is the operator of the majority of the Subject Interests.
Hilcorp’s 2018 Plan for the Subject Interests includes two facilities projects and seven well recompletions. While no new drilling activity is planned on the Subject Interests for 2018, existing wells will continue to be operated and Hilcorp will be the operator of all the projects included in the 2018 Plan.
The sale of San Juan Basin assets, including the Subject Interests, from Burlington Resources Oil & Gas Company LP to Hilcorp closed on July 31, 2017. Capital expenditures of approximately $0.4 million, which were primarily attributable to the purchase, refurbishment, and installation of gas compressors, were included in calculating royalty income paid to the Trust in calendar year 2017.
Over the past several months, Hilcorp has worked on integrating systems, stabilizing operations and identifying viable project opportunities in the San Juan Basin. As such, Hilcorp recompleted one well on the Subject Interests in December 2017 incurring a cost of $105,500.
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. 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, 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.