FORT WORTH, Texas--(BUSINESS WIRE)--
The San Juan Basin Royalty Trust (NYSE:SJT) (the "Trust"), today
announced the capital project plan for 2017 as delivered to it by
Burlington Resources Oil & Gas Company LP ("Burlington"). Capital
expenditures for 2017 for properties subject to the Trust’s royalty
interest are estimated to be $1.7 million.
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 Burlington (the “Subject Interests”)
located in the San Juan Basin and more particularly in San Juan, Rio
Arriba and Sandoval counties of northwestern New Mexico. Burlington is
the operator of the majority of the Subject Interests.
Burlington’s announced 2017 plan for the Subject Interests includes 10
miscellaneous facilities projects and three well recompletions. No new
drilling activity is planned for 2017. Of the $1.7 million,
approximately $0.64 million will be allocated to 10 maintenance and
facilities projects attributable to the capital budgets for 2016 and
prior years. Burlington will be the operator of all the projects
included in the 2017 plan.
In light of the challenged price environment for natural gas and natural
gas liquids, Burlington plans to continue the suspension of its drilling
program in the San Juan Basin in 2017. Existing wells will continue to
be operated. Burlington reports that based on its actual capital
requirements, the pace of regulatory approvals, the mix of projects and
swings in the price of natural gas, the current estimated capital
expenditures for 2017 are subject to change.
Capital expenditures of approximately $1.38 million were included in
calculating royalty income paid to the Trust in calendar year 2016.
Approximately $0.64 million covered 20 maintenance and facilities
projects budgeted for prior years. The $0.74 million balance for 2016
expenditures was allocated to eight miscellaneous facilities projects
and one well recompletion.
As stated above, the capital expenditures reported by Burlington in
calculating royalty income for 2016 included approximately $0.64 million
attributable to the capital budgets for prior years. This occurs because
capital expenditures are deducted in calculating royalty income in the
month they are accrued, and projects within a given year's budget often
extend into subsequent years. Further, Burlington's accounting period
for capital expenditures runs through November 30 of each calendar year,
such that capital expenditures incurred in December of each year are
actually accounted for as part of the following year's capital
expenditures. Also, for wells not operated by Burlington, Burlington's
share of capital expenditures may not actually be paid by it until the
year or years after those expenses were incurred by the operator.
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.
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Source: San Juan Basin Royalty Trust