San Juan Basin Royalty Trust (SJT): Business Model Canvas [Dec-2025 Updated]

You're looking at the San Juan Basin Royalty Trust (SJT), and honestly, it's one of the most purely passive plays on natural gas you can find, but it's currently stuck in a bind. This isn't an operating company; it's a fixed legal structure owning a 75% net overriding royalty interest in those New Mexico acres, managed by Argent Trust Company. Here's the rub: while Hilcorp San Juan L.P. runs the wells, the Unit Holders aren't seeing cash distributions because the Trust is battling a cumulative $8,722,969 net deficit from Excess Production Costs, even as it covers its own administrative burn, like the $21,200 paid in October 2025. Below, we map out exactly how this passive income stream is supposed to work-and what it takes for that revenue to finally flow to you again.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that keep the San Juan Basin Royalty Trust (SJT) running, especially when royalty income isn't covering the bills. These partnerships are critical for managing the assets and the Trust's administrative survival.

Hilcorp San Juan L.P. (Hilcorp) as the Exclusive Operator

Hilcorp San Juan L.P. is the entity that actually runs the wells and generates the royalty income from the Subject Interests. Their operational decisions directly impact the Trust's cash flow, particularly through production costs and capital expenditures.

For the calendar year 2025, Hilcorp estimated its capital expenditures for the Subject Interests to be approximately $9.0 million. This represented a significant shift, being a 73.5% reduction from the projected $34.0 million in capital expenditures for 2024. The 2025 Plan allocated:

• $4.0 million to seven new vertical drill projects.
• $4.5 million to 22 recompletions and workovers.
• $0.5 million to facilities projects.

When costs exceed revenue, Hilcorp charges the resulting deficit, known as Excess Production Costs, to the Trust's net proceeds. As of the November 2025 reporting, the cumulative Excess Production Costs stood at approximately $10,452,021 gross, or $7,839,016 net to the Trust. This balance must be repaid before Unit Holders receive distributions.

Here's a look at the operational results Hilcorp reported for specific production months in 2025:

Argent Trust Company as the Successor Trustee

Argent Trust Company handles the administrative side of the Trust. Their primary function is collecting the Royalty Income and making distributions after deducting expenses and funding cash reserves. The Trustee has the discretion to manage cash reserves, which were planned to be replenished up to $2.0 million.

The Trust's administrative expenses are a key area of focus, especially when distributions are suspended. For the three months ended September 30, 2025, general and administrative expenses decreased by $270,968 (70.1%) compared to the same period in 2024. For the nine months ended September 30, 2025, these expenses decreased by $1,143,872 (52.9%) compared to the first nine months of 2024. Still, administrative costs must be covered.

Here are some recent monthly administrative expense figures:

• October 2025 Administrative Expenses: $21,200.
• August 2025 Administrative Expenses: $20,722.
• January 2025 Administrative Expenses: $113,093.

Cash reserves have been heavily utilized to cover these shortfalls. Total cash reserves stood at $29,160 as of September 30, 2025, down significantly from a previous level of $1.8 million as of April 30, 2024.

Texas Bank Providing a Line of Credit

When interest income and cash reserves weren't enough, the Trust turned to Texas Bank for liquidity to cover ongoing administrative expenses. On May 21, 2025, the Trust entered into a promissory note to establish a Line of Credit (LOC) with Texas Bank for $2,000,000.

The LOC bears interest at a rate of prime plus 1% per annum, which was 8.5% at June 30, 2025. The maturity date for the Note is May 21, 2027, after which principal payments begin. The LOC is secured by substantially all of the Trust's assets.

The LOC has been actively used to cover administrative expenses:

The Trust must repay the principal and interest on the Line of Credit before distributions to Unit Holders can resume.

Professional Consultants and Outside Counsel

The relationship with external experts is essential for governance and operational oversight. The Trust's Consultant provides recommendations on how production is gathered, processed, and sold under market-sensitive agreements. Furthermore, the Trustee is responsible for providing the Trust's Annual Reports containing its completed audited financial statements. The Trust's ability to manage Hilcorp's cost reporting is implied by the need to track and reduce the Excess Production Costs, which stem from Hilcorp's operations.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Key Activities

You're looking at the core functions of San Juan Basin Royalty Trust (SJT), which, honestly, is less about growing a business and more about managing a declining asset base under a fixed structure. The key activities are all about cash flow management, or the lack thereof, right now.

Collecting the 75% net overriding royalty income from the operator

The Trust's primary activity is collecting its 75% net overriding royalty interest (the Royalty) from Hilcorp Energy, the operator in the San Juan Basin. This collection is currently entirely theoretical, though. For the third quarter ended September 30, 2025, the Trust reported revenue of just $0.000385 million (or $385), leading to a net loss of $0.111352 million for that period. To be fair, the revenue for the nine months ended September 30, 2025, was $0.011608 million, a massive drop from $7.02 million a year ago. The main issue is that all net proceeds are currently being applied to the cumulative deficit, meaning the Trust isn't receiving any royalty income to distribute.

Distributing monthly net proceeds to Unit Holders (currently suspended)

The Trust indenture mandates monthly distributions of the excess of preceding month's royalty income over expenses. However, this activity is entirely suspended. The Trust suspended its July 2025 distribution, which was the third consecutive month without a payout. Furthermore, the Trustee declared no cash distribution for the October 2025 distribution period due to excess production costs and low natural gas pricing.

Paying Trust administrative expenses (e.g., $21,200 for October 2025)

Even when no distributions are made, the Trust must cover its administrative overhead. This is a fixed, non-negotiable activity. For the month of October 2025, the Trust administrative expenses totaled $21,200. You need to know exactly how these small, recurring costs are covered when revenue is zeroed out by the deficit. Here's the quick math on how October's expenses were covered:

• Interest income received was $97.
• A draw from the Line of Credit was $19,305.
• Total coverage was $19,402 (Interest + LOC Draw).
• The remaining $1,798 (the difference between the $21,200 expense and the $19,402 coverage) was covered by cash reserves.

Monitoring and auditing the operator's production and cost calculations

This is a crucial, ongoing activity, especially given the current situation with Hilcorp. The Trustee monitors the operator's reporting, which is also subject to a comprehensive audit by professional consultants and outside counsel to check compliance. For the production month of August 2025, Hilcorp reported total revenue of $5,384,015, split between $5,225,259 in gas revenues and $158,756 in oil revenues. Production costs (excluding the deficit carryover) were $3,420,906. The net result of this monitoring is tracking the deficit, which as of the October 21, 2025 report, stood at approximately $11,630,625 gross ($8,722,969 net to the Trust).

The Trust's key performance indicators from the August 2025 reporting period show the underlying asset health:

Managing cash reserves and the Line of Credit to cover shortfalls

Since net proceeds are being applied to the deficit, the Trust must actively manage its liquidity tools. The Trustee must repay the outstanding Line of Credit balance plus interest, and replenish cash reserves up to $2,000,000 before distributions can restart. The Line of Credit balance at Texas Bank increased to $293,440 after the draw to cover October administrative expenses. As of September 30, 2025, the total cash reserves stood at $29,160. The Trustee is authorized to use these reserves to cover liabilities, and in October 2025, $1,798 of reserves was used to pay LOC interest, leaving the balance at $27,243 after that payment. It's a tightrope walk; the $2 million reserve target is a major hurdle before you see any cash flow.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Key Resources

You're looking at the core assets that allow San Juan Basin Royalty Trust (SJT) to function, which, honestly, is a very simple structure. The Trust doesn't operate wells; it just collects a share of the revenue. That share is the single most important resource here.

The Trust's principal asset is a 75% net overriding royalty interest (the 'Royalty') carved out of oil and gas leasehold and royalty interests in the San Juan Basin of northwestern New Mexico, with Hilcorp San Juan L.P. being the current owner of the underlying Subject Interests. This structure means the Trust is entirely dependent on the performance and capital decisions of Hilcorp.

The scope of this royalty interest covers significant acreage, which is a critical physical resource, even if the Trust doesn't manage it directly. Here are the specifics on the underlying properties:

• Approximately 119,000 net producing acres in San Juan, Rio Arriba, and Sandoval Counties of northwestern New Mexico.
• The total gross acreage associated with the Subject Interests is 151,900 acres.
• The Trust has no employees and no control over operations or capital expenditures.

The legal framework governing this passive collection mechanism is the Trust Indenture. This fixed legal contract, established in 1980 and last amended effectively in 2007, dictates the Trustee's primary function: collecting monthly net proceeds (Royalty Income) and distributing the excess after deducting administrative expenses and setting aside cash reserves. The Indenture strictly limits the Trustee's ability to engage in any business or commercial activity, including acquiring additional properties.

Financial liquidity is a key resource, though currently constrained by liabilities. The Trust's ability to meet short-term obligations is paramount, especially since distributions are suspended. Here's a snapshot of the financial position as of late 2025, based on the latest available reports:

The current cash balance of $27,243 as of October 2025 is significantly below the required reserve replenishment target of $2,000,000. Furthermore, the Trust cannot resume distributions until the cumulative excess production costs, which stood at approximately $8,722,969 net to the Trust in October 2025, are fully repaid, and the Line of Credit is settled. This liability, stemming from Hilcorp's 2024 horizontal well drilling costs, effectively consumes all current net proceeds until cleared.

The Trust's financial resources are defined by what it can collect and what it owes. Remember, the Trust's income is entirely dependent on production and commodity prices, which are outside its control. Finance: draft 13-week cash view by Friday.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Value Propositions

Passive, direct exposure to natural gas and oil commodity prices.

You receive direct exposure to the realized prices for the underlying production, which is over 99.8% natural gas as of December 31, 2024. This exposure is evident in the reported revenues; for the production month of April 2025, total revenue from the Subject Interests was $4,558,987, broken down into gas revenues of $4,403,222 and oil revenues of $155,765. The direct link to commodity performance is also reflected in the Q3 2025 results, where San Juan Basin Royalty Trust reported revenue of $400 and an adjusted revenue of $0. As of December 02, 2025, the Unit price was 5.520.

The nature of this exposure is quantified by the underlying asset structure:

Potential for high, variable monthly cash distributions (when available).

The value proposition includes the potential for monthly cash flow, though this is highly variable and dependent on net proceeds exceeding Trust liabilities and expenses. For the first ten months of 2025, the Net Cash Total Distribution and Distribution per Unit were $0.00 for each month, resulting in a 2025 Year to Date total of $0.000000 as of the October 2025 declaration. This follows a period where the Trust had suspended distributions since May 2024. The Trust declared no cash distribution for June 2025 because net proceeds were applied to the balance of excess production costs.

Here is a comparison of the distribution reality for the first part of 2025 versus prior periods:

The Trust will not resume distributions until future net proceeds are sufficient to pay Trust liabilities and replenish cash reserves. The cumulative Excess Production Costs (EPC) balance as of September 30, 2025, was approximately $10,195,300 net to the Trust, which must be recovered from future net proceeds before Royalty Income is paid to Unit Holders.

Tax transparency and benefits for Unit Holders as a grantor trust.

The San Juan Basin Royalty Trust is classified for federal income tax purposes as a grantor trust, which means the Trust itself is not subject to tax at the trust level. This structure means Unit Holders are considered to own the Trust's income and principal directly. Unit Holders must report their share of production revenues as ordinary income from oil and natural gas royalties. A key benefit is the entitlement to claim depletion with respect to that income. For Unit holders who acquired Units after October 11, 1990, the percentage depletion amount should equal the gross royalty income multiplied by 15%.

Key tax structure points include:

• Tax status: Grantor Trust for federal income tax purposes.
• Tax classification: Widely-held fixed investment trust (WHFIT) / Non-mortgage WHFIT (NMWHFIT).
• Unit Holder reporting: Ordinary income from oil and natural gas royalties.
• Potential deduction: Entitlement to claim depletion.

No direct exposure to the operational or capital expenditure risks of drilling.

You are shielded from the day-to-day operational and capital expenditure risks because the properties are operated by Hilcorp San Juan L.P. The Trustee's primary function is collecting net proceeds, not managing operations. The Trust is not liable for any production costs or liabilities attributable to the Royalty. However, the operator's costs can create a liability for the Trust via the Excess Production Costs mechanism. For the production month of April 2025, Hilcorp reported total production costs (excluding EPC) of $4,017,917, which included lease operating expenses of $2,510,928, severance taxes of $568,685, and capital costs of $1,122,304. Hilcorp estimated its 2025 capital expenditures for the Subject Interests to be $9.0 million.

The structure of cost recovery is defined by the following:

• Operator: Hilcorp San Juan L.P.
• Trust Liability: Not liable for production costs or liabilities.
• Cost Recovery Mechanism: Excess Production Costs must be recovered from future net proceeds.
• Cumulative EPC (Net to Trust) as of September 30, 2025: $10,195,300.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Customer Relationships

The relationship San Juan Basin Royalty Trust (SJT) maintains with its Unit Holders is almost entirely one-way and transactional, reflecting its nature as a passive royalty trust. You, as a Unit Holder, are primarily connected through the flow of funds and required regulatory disclosures.

Transactional relationship via monthly cash distributions to Unit Holders.

This is the core economic interaction. The Trust makes monthly distributions of the excess of the preceding month's royalty income received over expenses incurred. However, as of late 2025, this transactional flow has been entirely suspended due to cost recovery requirements. For instance, the Trust declared no cash distribution for the months of June 2025, October 2025, and November 2025. The year-to-date total net cash distribution through October 2025 was reported as $0.000000. This suspension is directly tied to the need to recover Excess Production Costs incurred previously. As of September 30, 2025, the balance of these cumulative costs stood at approximately $13,593,734 gross ($10,195,300 net to the Trust). Before distributions can resume, future net proceeds must first cover this deficit, replenish a reserve of $2,000,000, and repay the Line of Credit balance.

Information dissemination through mandatory SEC filings and press releases.

Transparency is maintained through formal, regulated channels. The Argent Trust Company, as Trustee, furnishes information to Unit Holders via mandatory filings with the Securities and Exchange Commission (SEC). You can review the latest Form 8-K reports, such as the one filed on October 21, 2025, or the 10-Q filed on November 13, 2025, on the SEC's website (www.sec.gov). Furthermore, the Trust issues monthly press releases detailing operational and financial updates, which, as of July 21, 2025, are self-published on the Trust's website, www.sjbrt.com, rather than being sent via wire distribution.

Key information channels include:

• Mandatory filings such as Form 8-K and 10-Q with the SEC.
• Monthly press releases published on www.sjbrt.com.
• The Trustee's primary function is collecting proceeds and making distributions.

Minimal, passive interaction; the Trust has no employees or active management.

Honestly, the interaction is as passive as it gets for a security. The Trustee's primary function is strictly limited to collecting monthly net proceeds attributable to the Royalty and making distributions after deducting administrative expenses and setting cash reserves. The structure explicitly prevents active management; the Trustee is not empowered to engage in any business or commercial activity, nor can it use the Trust Estate to acquire additional properties. This lack of active management means there are no employees to interact with regarding operations, keeping the relationship purely administrative and financial.

Unit Holders receive individualized tax letters (not K-1s) annually.

For your annual tax compliance, you receive individualized documentation. Because the San Juan Basin Royalty Trust is a grantor trust for federal income tax purposes, the proper classification of income and expense depends on your specific facts and circumstances. While Unit Holders should consult their own tax advisors, the Trust provides necessary information on its website (www.sjbrt.com) or upon request to the Trustee. For Unit Holders who acquired their Units after October 11, 1990, the Trust provides data that allows for the calculation of a Percentage Depletion per Unit of 0.025666, which may be claimed if it exceeds the Cost Depletion amount. This documentation helps you compute your depletion deduction, which is a critical step for reporting income from the Trust. Finance: draft the 2025 tax information summary for the website by February 1, 2026.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Channels

You're looking at how San Juan Basin Royalty Trust (SJT) connects its value proposition-the 75% net overriding royalty interest-to its unitholders and the market. It's a straightforward setup, relying on established financial infrastructure and public disclosure rules.

New York Stock Exchange (NYSE) for trading Units under the symbol SJT

The Units of beneficial interest trade publicly on the New York Stock Exchange under the ticker symbol SJT. This is the primary market channel for liquidity. As of the close on December 03, 2025, the Unit price was $5.77. The Trust has been listed on the NYSE since 1980. For context on market size at that date, the Market Cap stood at $268.93M, based on 46.61M Shares Outstanding.

Here's a quick look at the trading context around that date:

The stock trades within a wide, horizontal trend, which means you see price action between levels like the 52-week low of $3.66 and the high of $7.22.

Brokerage firms and transfer agents for distribution of cash payments

For Unit holders, the distribution channel is managed through a designated transfer agent. The current Transfer Agent is Computershare Investor Services, whose customer service line is (312) 360-5154. The Trustee, Argent Trust Company, also handles related inquiries, reachable at (855) 588-7839. Brokerage firms facilitate the initial purchase, as San Juan Basin Royalty Stock can be bought through virtually any brokerage service.

However, cash payments are currently halted. The Trust has reported $0.00 Total Distribution per Unit for every month from January 2025 through October 2025. The suspension of distributions began in May 2024 due to excess operating costs exceeding royalty income.

The distribution status for 2025 shows:

• Total YTD Distribution for 2025: $0.000000.
• The Trust suspended distributions since May-2024.
• The balance of cumulative Excess Production Costs net to the Trust was $10,195,300 as of September 30, 2025.
• No cash distributions will resume until future net proceeds cover Trust liabilities and replenish cash reserves.

Official Trust website and SEC EDGAR for financial and production data

Transparency is delivered via the official Trust website and mandatory regulatory filings. The official site is www.sjbrt.com. This is where Unit Holders can access monthly tax information and depletion calculators.

Mandatory financial and production data flows through the SEC EDGAR database, accessible via services like Nasdaq or Fintel. The 2025 3rd Quarter Report was published on December 03, 2025. This report details the operational performance that dictates future cash flow.

Key production and cost metrics from the period ending September 30, 2025, show the current state of the royalty income stream:

• Natural gas production for the three months ended September 30, 2025: 6,918,497 Mcf.
• Average natural gas price for the three months ended September 30, 2025: $2.11 per Mcf.
• Total Gross Proceeds for the nine months ended September 30, 2025, increased by approximately 50.0% compared to the same period in 2024.
• Trust administrative expenses for the three months ended September 30, 2025, decreased by 70.1% compared to the same period in 2024.
• There was no Royalty Income distributed to the Trust by Hilcorp for the three months ended September 30, 2025, as net proceeds were applied to Excess Production Costs.

Finance: draft 13-week cash view by Friday.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Customer Segments

You're looking at the core group that holds beneficial interests in San Juan Basin Royalty Trust (SJT), which is a fixed investment trust listed on the New York Stock Exchange (NYSE) since 1980.

Individual and institutional investors seeking commodity-linked income.

This segment is drawn to the monthly distribution structure, though it's important to note this payment is taxed as ordinary income, not the lower qualified dividend tax rate. As of the close on December 3, 2025, the Unit price was $5.77, having traded within a 52-week range of $3.66 to $7.22. The Trust's primary asset is a 75% net overriding royalty interest in oil and gas properties in the San Juan Basin. The Trustee's function is simply collecting net proceeds and distributing them after expenses and reserve requirements are met; the Trustee cannot acquire additional properties.

• Trust listed on NYSE since 1980.
• Distribution is a monthly payment, not a qualified dividend.
• Stock price as of December 3, 2025: $5.77.
• The Trust holds a 75% net overriding royalty interest.

Investors bullish on natural gas prices in the San Juan Basin.

Investor interest directly correlates with the realized price of natural gas, as the Trust's distributable income is the net proceeds from production. For instance, the production month of December 2024, combined with continued low natural gas pricing, resulted in the Trust declaring no cash distribution for February 2025 due to excess production costs. Conversely, for the nine months ended September 30, 2025, Total Gross Proceeds increased approximately 50.0% compared to the same period in 2024, primarily due to slightly higher natural gas prices and higher production volumes.

The operator's 2025 Plan allocated approximately $4.0 million to seven new vertical drill projects and approximately $4.5 million to 22 recompletion and workover projects, which are the activities that ultimately affect the Royalty Income stream.

Tax-sensitive investors utilizing the grantor trust structure for depletion benefits.

The structure itself is a key draw for certain investors because the San Juan Basin Royalty Trust is taxed as a grantor trust, meaning it is not taxed at the trust level. Unit Holders report their share of income and principal directly. This allows Unit Holders to claim depletion with respect to that income, which can be a return of capital for tax purposes. For Units acquired after October 11, 1990, Unit Holders are allowed the greater of cost or percentage depletion, with percentage depletion typically calculated at 15% of the gross royalty income amount. Investors holding units in tax-deferred accounts, like an IRA, often use this structure to ignore the immediate tax complexities.

Holders in taxable accounts receive Form 1099-MISC and Form 1099-INT, not a K-1, which dictates their reporting requirements. The Trustee maintains a plan to increase cash reserves to $2.0 million before resuming distributions, and as of September 30, 2025, the cumulative Excess Production Costs stood at approximately $10,195,300 net to the Trust.

Here's a quick look at some key figures relevant to the Trust's operation and investor status as of late 2025:

What this estimate hides is the monthly volatility in Royalty Income, which directly dictates the immediate distribution amount. Finance: draft 13-week cash view by Friday.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Cost Structure

You're looking at the costs that chip away at the gross royalty income San Juan Basin Royalty Trust (SJT) receives from Hilcorp San Juan L.P. These costs are the primary reason distributions have been suspended, so understanding their structure is key.

The Trust's direct costs are relatively straightforward, revolving around administration and servicing legacy debt/deficits. The Trustee, Argent Trust Company, incurs fixed administrative expenses. For October 2025, these expenses totaled exactly $21,200.

The biggest drain, however, is the obligation to clear the cumulative net Excess Production Costs (EPC). This deficit occurs when production costs and capital expenditures exceed the gross proceeds for a period. As of the October 2025 reporting, the net deficit stood at $8,722,969. Until this balance is fully repaid, all net proceeds are applied to this liability, meaning Unit Holders receive no distributions. To cover ongoing Trust expenses like the Trustee fees, the Trust relies on its Line of Credit (LOC) at Texas Bank. The outstanding principal balance on this LOC as of October 2025 was $293,440. Interest expense is a carrying cost on this debt; for October 2025, $1,798 in cash reserves was used to pay this interest.

Here's a look at the Trust's key liabilities and recurring direct costs:

• Cumulative Net Excess Production Costs (as of October 2025): $8,722,969
• Trustee Fixed Administrative Expenses (October 2025): $21,200
• Outstanding Line of Credit Principal (as of October 2025): $293,440
• Required Reserve Replenishment: $2,000,000 (before distributions resume)

Before any royalty income even reaches the Trust for these administrative deductions, the operator, Hilcorp, makes several significant pre-deductions from the gross proceeds generated by the Subject Interests. These deductions are the operational cost structure that directly impacts the Trust's revenue stream. We can look at the detailed breakdown provided for the August 2025 production month to see the scale of these items.

These operator-level deductions are substantial and directly reduce the gross revenue available to the Trust:

To be fair, the capital costs in August 2025 were a credit, which helped reduce the net income deficit that month, unlike in prior months. For instance, capital costs for the production month of July 2025 were $333,372. The Trust's ability to resume distributions depends on future net proceeds being sufficient to cover the EPC balance, replenish the $2,000,000 cash reserve, and repay the LOC principal and interest. Finance: draft 13-week cash view by Friday.

San Juan Basin Royalty Trust (SJT) - Canvas Business Model: Revenue Streams

The primary revenue stream for San Juan Basin Royalty Trust (SJT) is the net proceeds from the 75% net overriding royalty interest (the Royalty) carved out of oil and gas leasehold interests in the San Juan Basin of New Mexico, which are operated by Hilcorp San Juan L.P.. This Royalty is the principal asset of the Trust.

Revenue generation is directly tied to the performance of the underlying assets and commodity markets. For instance, Total Gross Proceeds for the nine months ended September 30, 2025, increased approximately 50.0%, or $19.4 million, compared to the same nine-month period in 2024. This increase was driven by slightly higher natural gas prices and higher production volumes, particularly from two new horizontal wells installed in 2024.

The revenue stream is highly volatile, tied to natural gas and oil commodity prices. Natural gas is the dominant reserve, with 99.8% of estimated proved reserves being natural gas as of December 31, 2024. The realized price for natural gas directly impacts the net proceeds available. For example, the average gas price for August 2025 was reported at $2.29 per Mcf. This contrasts with the average price in April 2025, which was $1.87 per Mcf.

Here's a look at some key revenue-related figures as of late 2025:

Interest income from short-term investments of cash reserves exists, but its contribution is currently minimal and secondary to the primary royalty income. The Trust invests royalty income in short-term instruments until distribution. However, interest income has decreased for the three and nine months ended September 30, 2025, compared to the same periods in 2024, primarily due to the decrease in Royalty Income and lower cash reserves. For instance, interest income was only $97 for the month of October 2025, and $1,742 for April 2025. These small amounts are typically applied to cover a portion of the Trust's administrative expenses.

Crucially, no cash distribution revenue is currently available to Unit Holders due to the Excess Production Costs (EPC) deficit. The Trust makes monthly distributions only from the excess of preceding month's royalty income received over expenses incurred. Until the cumulative EPC balance is paid in full, the Trust will not receive royalty income, as all net proceeds are applied to the deficit. The conditions for resuming distributions are clear, though the timing is uncertain:

• Repay the balance of cumulative Excess Production Costs, which stood at approximately $10,195,300 net to the Trust as of September 30, 2025.
• Replenish the mandatory cash reserve to $2,000,000.
• Repay the principal and interest on the Trust's Line of Credit (LOC). As of October 2025, the LOC balance was $293,440.

The continued application of net proceeds to the EPC means that, for the three months ended September 30, 2025, even though 75% of the net proceeds ($1,174,206) would otherwise have been payable as Royalty Income, it was instead applied to reduce the deficit.