Executive Summary

No distributions in Q4 2024 as excess production costs and continued low natural gas pricing drove net proceeds negative; deficits peaked in November and modestly improved in December as realized gas prices rose .
Q4 volumes rose sequentially (1.88MMcf → 2.26MMcf → 2.67MMcf) and average realized gas prices improved ($1.92/Mcf → $2.10/Mcf → $3.14/Mcf), but elevated lease operating expenses and capital costs (especially in November) kept the Trust in deficit .
The Trustee continues to utilize and then rebuild cash reserves (ending balances: $0.761M in Dec, $0.651M in Jan, $0.512M in Feb) and reiterated that distributions will not resume until net proceeds cover liabilities and reserves are replenished to $2.0M .
Operator Hilcorp outlined a materially lower 2025 capital plan of ~$9.0M vs. ~$34.0M projected for 2024 (actual 2024 capex ~$33.6M through November), a potential tailwind to net proceeds if commodity prices hold .
There was no Q4 2024 earnings call transcript, and Wall Street consensus coverage was effectively unavailable (no EPS/EBITDA/target price consensus); estimate comparisons are not meaningful .

What Went Well and What Went Wrong

What Went Well

Realized gas prices improved through Q4: $1.92/Mcf in October, $2.10/Mcf in November, and $3.14/Mcf in December, supporting better gross proceeds sequentially .
Volumes increased sequentially, with gas volumes rising from 1.88MMcf (Oct) to 2.26MMcf (Nov) to 2.67MMcf (Dec), enhancing revenue leverage to price recovery .
The excess cost deficit narrowed in December (cumulative ~~$27.28M gross) from November (~~$29.51M gross), reflecting price/volume improvements and lower capital spending vs. November’s spike .

“Excess production costs occur when production costs and capital expenditures exceed the gross proceeds for a certain period” and were “due primarily to significant lease operating expenses and capital expenditures associated with Hilcorp’s 2024 capital project plan” .

What Went Wrong

Capital costs were exceptionally high in November ($9.91M), driving total production costs to $13.14M and pushing excess costs to ~$29.51M gross ($22.13M net) for the next distribution cycle .
Lease operating expenses stayed elevated across Q4 ($2.47M in Oct, $2.63M in Nov, $2.75M in Dec), compressing net proceeds despite price recovery .
Distributions remained suspended for December, January, and February due to deficits; reserves continued to be drawn to cover administration, further delaying any resumption of payments .

Financial Results

Q4 2024 Operating Metrics (Production months: October, November, December 2024; oldest → newest)

Metric	Oct 2024	Nov 2024	Dec 2024
Total Revenue ($)	$3,674,540	$4,880,618	$8,687,779
Gas Revenue ($)	$3,602,210	$4,752,207	$8,390,577
Oil Revenue ($)	$72,330	$128,411	$297,202
Total Production Costs ($)	$7,059,218	$13,139,376	$6,459,217
Lease Operating Expenses ($)	$2,468,962	$2,634,510	$2,751,758
Severance Taxes ($)	$327,389	$597,211	$825,059
Capital Costs ($)	$4,262,867	$9,907,655	$2,882,401
Excess Production Costs to next distribution (Gross/Net)	~$21,248,008 / ~$15,936,006	~$29,506,766 / ~$22,130,075	Cumulative deficit ~$27,278,204 / ~$20,458,653
Admin Expenses ($)	$204,336	$113,093	$141,887
Interest Income ($)	$3,689	$3,497	$2,703.69
Cash Reserves Utilized ($)	$200,647	$109,596	$139,183
Ending Cash Reserves Balance ($)	$760,919	$651,323	$512,140
Gas Volumes (Mcf)	1,880,071	2,261,819	2,669,858
Gas Volumes (MMBtu)	2,088,968	2,513,132	2,966,509
Avg Gas Price ($/Mcf)	$1.92	$2.10	$3.14
Avg Gas Price ($/MMBtu)	$1.72	$1.89	$2.83

Prior Two Quarters’ Trend Snapshot (Q3 2024 production months: July, August, September; oldest → newest)

Metric	Jul 2024	Aug 2024	Sep 2024
Total Revenue ($)	$3,905,235	$3,594,338	$2,853,533
Gas Revenue ($)	$3,670,009	$3,442,328	$2,651,297
Oil Revenue ($)	$235,226	$152,010	$202,236
Total Production Costs ($)	$6,966,097	$7,227,419	$5,566,414
Lease Operating Expenses ($)	$2,598,942	$2,408,163	$2,592,399
Severance Taxes ($)	$413,728	$463,668	$362,225
Capital Costs ($)	$3,953,427	$4,355,588	$2,611,790
Excess Costs to next distribution (Gross/Net)	~$11,517,368 / ~$8,638,026	~$15,150,449 / ~$11,362,837	~$17,863,330 / ~$13,397,497
Admin Expenses ($)	$145,121	$187,698	$59,870
Interest Income ($)	$5,679	$6,302	$4,301
Gas Volumes (Mcf)	1,891,889	1,922,538	1,869,291
Gas Volumes (MMBtu)	2,102,099	2,136,153	2,076,989
Avg Gas Price ($/Mcf)	$1.94	$1.79	$1.42
Avg Gas Price ($/MMBtu)	$1.75	$1.61	$1.28

Notes:

There was one positive cash distribution earlier in the year ($0.022864 per Unit in April, tied to February production), before deficits emerged from March onward .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Monthly Cash Distribution Policy	Q4 2024 and into Q1 2025	Distributions contingent on positive net proceeds and reserve levels	No distributions; excess costs charged to next distribution until net proceeds sufficient and reserves replenished	Maintained (no distributions)
Cash Reserves Target	Ongoing	Increase to $2.0M; reserves at $1.8M as of Apr 30, 2024	Continue to replenish/increase to $2.0M prior to resuming distributions; ending balances: $0.761M (Dec), $0.651M (Jan), $0.512M (Feb)	Maintained target; balances declined during deficit
Operator Capex Plan (Hilcorp)	CY2025	N/A	~~$9.0M total; 7 new vertical drills (~~$4.0M), 22 recompletions/workovers (~~$4.5M), facilities (~~$0.5M)	New 2025 plan (lower vs. 2024)
Operator Capex Actuals	CY2024	Projected ~$34.0M	~$33.6M actual through Nov 2024; ~$24.6M horizontal Mancos, ~$8.0M recompletions/workovers, ~$1.0M facilities	Actual near plan

Earnings Call Themes & Trends

No earnings call transcript was available for Q4 2024; themes are inferred from Trustee press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Natural gas pricing	Q2/Q3: Depressed realized prices ($1.41–$1.94/Mcf) constrained proceeds	Prices improved ($1.92 → $2.10 → $3.14/Mcf)	Improving
Production volumes	Q2/Q3: Volumes ~1.87–1.92MMcf per month	Sequential increase to 2.67MMcf by December	Improving
Capital expenditure intensity	Q2/Q3: High capital costs ($2.61–$4.36M monthly)	November spike to $9.91M; December normalized to $2.88M	Mixed (volatile; November spike)
Lease operating expenses	Q2/Q3: ~$2.41–$2.60M monthly	Elevated ~$2.47–$2.75M monthly	Stable-high
Distributions/reserves	Q2/Q3: Reserves increased to $1.8M; distributions suspended from May onward	No distributions; reserves used to fund admin; ending balances fell	Negative (until deficits clear)
Audit and compliance	Ongoing audits of pricing and charges; engagement with Hilcorp	Continued audits and engagement with Hilcorp; forward-looking caution	Ongoing

Management Commentary

“It will not declare a monthly cash distribution… due to excess production costs… as well as continued low natural gas pricing.”
“Excess production costs… are due primarily to significant lease operating expenses and capital expenditures associated with Hilcorp… 2024 capital project plan.”
“Prior to any future distributions… the Trustee plans to replenish the cash reserves and continue to increase the cash reserves to $2.0 million.”
“Hilcorp… estimates its 2025 capital expenditures… to be approximately $9.0 million,” with 29 projects including new vertical drills and recompletions/workovers .
“Hilcorp… actual capital expenditures from January 2024 through November 2024 totaled approximately $33.6 million,” with ~$24.6M on horizontal Mancos drilling .

Q&A Highlights

No Q4 2024 earnings call; no Q&A available .

Estimates Context

S&P Global consensus coverage appears unavailable for EPS, EBITDA, and target price; therefore, no beat/miss analysis relative to Street estimates can be performed .
Revenue actuals recorded by S&P Global for Q4 2024 and FY 2024 were present but consensus comparisons were not available; as such, we anchor on disclosed Trustee/Hilcorp operating figures above.*

Footnote: *Values retrieved from S&P Global.

Key Takeaways for Investors

Distributions remain suspended; the key resumption triggers are higher sustained realized gas prices, normalized operating/capital costs, and rebuilding the cash reserve to $2.0M .
Sequential improvement in Q4 prices and volumes is constructive; December’s narrowing deficit suggests positive operating momentum if capital intensity remains contained .
November’s outsized capital costs underscore sensitivity to operator spending; the 2025 ~$9.0M capex plan (vs. ~$34.0M in 2024) could materially improve net proceeds if commodity prices hold .
Elevated lease operating expenses persist; sustained LOE discipline is needed to translate price/volume gains into distributable cash .
The Trustee’s active audit and engagement with Hilcorp continues; any outcomes affecting pricing, cost allocations, or recoveries would be a catalyst for distributions .
Near term, trading remains tied to Henry Hub/realized San Juan gas pricing and monthly cost prints; watch for monthly press updates indicating further deficit reduction or reserve rebuild .
Medium term, lower 2025 capex combined with normalized LOE and firm gas prices could clear deficits and restart distributions; risk remains on commodity volatility and operator execution .

SAN JUAN BASIN ROYALTY TRUST (SJT)·Q4 2024 Earnings Summary