San Juan Basin Royalty Trust (NYSE:SJT) experienced a 2.33% decline in its share price from December 17 to December 24, 2025. This decrease positioned the company among the Energy Stocks that Lost the Most This Week. The drop in share price came after the company announced that it would not be declaring any cash distributions for the month of December. This decision was attributed to excessive production costs and low natural gas prices.
SJT operates as an express trust holding a 75% net overriding royalty interest in oil and natural gas properties in the San Juan Basin of northwestern New Mexico. The company distributes monthly royalty income to its unit holders. However, the recent decline was a result of the company reporting gross excess production costs of approximately $8.4 million. These costs were accrued due to the drilling of two new horizontal wells by Hilcorp in 2024.
In light of these excess production costs, SJT clarified that it would not be making any cash distributions until the balance of the production costs is repaid, a reserve of $2 million is replenished, and the principal and interest on the Trust’s line of credit at Texas Bank is repaid. Despite this setback, SJT’s share price has seen a 31% increase since the beginning of 2025.
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In conclusion, San Juan Basin Royalty Trust’s recent share price decline highlights the challenges faced by the company in managing production costs and market conditions. Investors should consider the company’s financial outlook and strategic decisions before making investment decisions in the energy sector.
