Want to see SJT full AI Analyst Report?
San Juan Basin Royalty (SJT) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Aug 13, 2026
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1Burlington may sell its interest in the San Juan Basin.
Burlington may, without the consent or approval of the Unit Holders, sell all or any part of its retained interest in the Subject Interests. Burlington, a wholly-owned subsidiary of ConocoPhillips, and other affiliates of ConocoPhillips are the principal operators of the majority of the Subject Interests. In a November 10, 2016 News Release, ConocoPhillips announced the initiation of a $5 to $8 billion divestiture program, which will focus primarily on North American natural gas assets. News outlets have reported that the divestiture program will include the proposed sale of ConocoPhillips' assets in the San Juan Basin. Although Burlington must require any purchaser(s) of its retained interest in the Subject Interests to assume Burlington's obligations with respect to those properties, such sale may not be in the best interests of the Trust and the Unit Holders. Any purchaser(s) may lack Burlington's experience in the Subject Interests or its creditworthiness. Furthermore, a sale by Burlington to one or more purchasers may increase the Trust's general and administrative expenses in the form of increased accounting, audit, legal, and administrative costs. ConocoPhillips has informed us that any sales process will be confidential. We cannot predict, and no assurances may be given, as to whether any or all of the Subject Interests will be sold, the timing of any such sale, the type of purchaser(s) or their plans (if any) to operate the Subject Interests.
- Accounting & Financial Operations - Risk 2Payment resulting from the Trust's audit exceptions to Burlington's calculation of Royalty Income may be significantly delayed, if payment is made at all.
Generally, each year the Trust completes an audit of Royalty Income for the previous fiscal year and provides notice to Burlington of audit exceptions during the second half of each year. Additional time is often required to resolve such audit exceptions, and in some cases, the audit exceptions have resulted in litigation lasting several years. Our audit of fiscal year 2016 Royalty Income may result in significant additional audit exceptions. Although we continue to seek resolution of these exceptions, we cannot provide any assurance as to whether they will be resolved in the Trust's favor and when they will be resolved. Audit exceptions may be resolved by court orders, settlement agreements between the parties and other methods that may not be favorable to the Trust and could result in a decrease in Royalty Income.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 26
- Share Price & Shareholder Rights - Risk 1Hilcorp or any third-party operator may abandon property underlying the Subject Interests, thereby terminating the related Royalty payable to the Trust that is attributable to the abandoned property.
Hilcorp or any third-party operator of the Underlying Properties could determine during periods of low commodity prices to shut in or curtail production from wells on the properties underlying the Subject Interests or plug and abandon marginal wells that otherwise may have been allowed to continue to produce for a longer period under conditions of higher prices. Hilcorp or any other operator may abandon any well or property without the consent of the Trust or the Trust unitholders if it reasonably believes that the well or property can no longer produce oil or natural gas in commercially paying quantities. This could result in termination of the Royalty relating to the abandoned well or property. The properties underlying the Subject Interests are sensitive to decreasing commodity prices. The commodity price sensitivity is due to a variety of factors that vary from well to well, including the costs associated with water handling and disposal, chemicals, surface equipment maintenance, downhole casing repairs and reservoir pressure maintenance activities that are necessary to maintain production. As a result, the volatility of commodity prices may cause the expenses of certain wells to exceed the well's revenue. If this scenario occurs, Hilcorp or any third-party operator may decide to shut-in the well or plug and abandon the well. This could reduce future cash distributions to Trust Unit Holders. FINANCIAL RISKS
- Share Price & Shareholder Rights - Risk 2The Royalty can be sold and the Trust can be terminated in certain circumstances.
The Trust will be terminated and the Trustee must sell the Royalty if holders of at least 75% of the Units approve the sale or vote to terminate the Trust, or if the Trust's gross revenue for each of two successive years is less than $1,000,000 per year. Following any such termination and liquidation, the net proceeds of any sale will be distributed to the Unit Holders and Unit Holders will receive no further distributions from the Trust. The Trustee cannot provide assurances that any such sale will be on terms acceptable to all Unit Holders. The Trustee cannot provide assurances the Trust will receive Royalty Income in 2026 as the Trust must first extinguish the balance of Excess Production Costs associated with Hilcorp's drilling of two horizontal wells during 2024. As of March 20, 2026 the balance of Excess Production Costs was $6,186,818 gross ($4,640,114 net to the Trust), and the Trust will not receive Royalty Income until the balance of Excess Production Costs (net to the Trust) is paid in full.
- Share Price & Shareholder Rights - Risk 3None of the Trustee, the Trust nor the Unit Holders control the operation or development of the properties underlying the Subject Interests.
Neither the Trustee nor the Unit Holders can influence or control the operation or future development of the properties underlying the Subject Interests. The properties underlying the Subject Interests are owned by Hilcorp and Hilcorp operates the majority of such properties and handles the calculation of the net proceeds attributable to the Royalty and the payment of Royalty Income to the Trust.
- Share Price & Shareholder Rights - Risk 4Unit Holders have limited voting rights.
Voting rights as a Unit Holder are more limited than those of stockholders of most public corporations. For example, there is no requirement for annual meetings of Unit Holders or for an annual or other periodic re-election of the Trustee. Unlike corporations, which are generally governed by boards of directors elected by their equity holders, the Trust is administered by a corporate trustee in accordance with the Indenture and other organizational documents. The Trustee has extremely limited discretion in its administration of the Trust.
- Share Price & Shareholder Rights - Risk 5If the Trust cannot meet the New York Stock Exchange continued listing requirements, the NYSE may delist the Trust Units.
Under the continued listing requirements of the NYSE, a company will be considered to be out of compliance with the exchange's minimum price requirement if the company's average closing price over a consecutive 30 trading day period ("Average Closing Price") is less than $1.00 (the "Minimum Price Requirement"). Under NYSE rules, a company that is out of compliance with the Minimum Price Requirement has a cure period of six months to regain compliance if it notifies the NYSE within 10 business days of receiving a deficiency notice of its intention to cure the deficiency. A company may regain compliance if on the last trading day of any calendar month during the cure period the company has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30-trading-day period ending on the last trading day of that month. If at the expiration of the cure period, both a $1.00 closing share price on the last trading day of the cure period and a $1.00 average closing share price over the 30-trading-day period ending on the last trading day of the cure period are not attained, the NYSE will commence suspension and delisting procedures. If delisted by the NYSE, a company's shares may be transferred to the over-the-counter ("OTC") market, a significantly more limited market than the NYSE, which could affect the market price, trading volume, liquidity and resale price of such shares. Securities that trade on the OTC markets also typically experience more volatility compared to securities that trade on a national securities exchange. During the cure period, the company's shares would continue to trade on the NYSE, subject to compliance with other continued listing requirements.
- Share Price & Shareholder Rights - Risk 6The market price for the Trust Units may not reflect the value of the Royalty held by the Trust.
The trading price for publicly traded securities similar to the Trust Units tends to be tied to recent and expected levels of cash distributions as well as oil and natural gas prices. The amounts available for distribution by the Trust vary in response to numerous factors outside the control of the Trust, including prevailing prices for sales of oil and natural gas production from the properties underlying the Subject Interests and the timing and amount of direct operating expenses and development expenses. Consequently, the market price for the Trust Units may not necessarily be indicative of the value that the Trust would realize if it sold the Royalty to a third-party buyer. In addition, such market price may not necessarily reflect the fact that, since the assets of the Trust are depleting assets, a portion of each cash distribution paid with respect to the Trust Units should be considered by investors as a return of capital, with the remainder being considered as a return on investment. As a result, distributions made to a Trust Unit Holder over the life of these depleting assets may not equal or exceed the purchase price paid by the Trust Unit Holder.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.