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San Juan Basin Royalty Trust Reports Operating Results (10-K)

March 01, 2011 | About:

San Juan Basin Royalty Trust (NYSE:SJT) filed Annual Report for the period ended 2010-12-31.

San Juan Basin Royalty Trust Ubi has a market cap of $1.18 billion; its shares were traded at around $25.33 with and P/S ratio of 37. The dividend yield of San Juan Basin Royalty Trust Ubi stocks is 6.6%. San Juan Basin Royalty Trust Ubi had an annual average earning growth of 3.1% over the past 10 years.Hedge Fund Gurus that owns SJT: Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates. Mutual Fund and Other Gurus that owns SJT: Jean-Marie Eveillard of First Eagle Investment Management, LLC, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

The Trust received approximately $80 million, $31.9 million, and $144.6 million in Royalty Income from BROG in each of the fiscal years ended December 31, 2010, 2009, and 2008, respectively. After deducting administrative expenses and accounting for interest income and any change in cash reserves, the Trust distributed approximately $78.4 million, $30.2 million, and $143.1 million to Unit Holders in each of the fiscal years ended December 31, 2010, 2009, and 2008, respectively. The Trusts corpus was approximately $14.7 million, $16.8 million, and $17.9 million as of December 31, 2010, 2009, and 2008, respectively.

Approximately $7.8 million of capital expenditures covered 264 projects budgeted for 2010. Approximately $10.3 million of those costs were incurred in new drilling activity, which included 40 new wells commenced in 2010 and to be operated by BROG and none to be operated by third parties. The balance of the expenditures allocable to current projects was attributable to the workover of existing wells and the maintenance and improvement of production facilities.

The $13.1 million of capital expenses reported by BROG for 2010 included approximately $5.3 million attributable to the capital budgets for prior years. This occurs because capital expenditures are deducted in calculating royalty income in the month they accrue, and projects within a given years budget often extend into subsequent years. Further, BROGs 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 years capital expenditures. In addition, with respect to wells not operated by BROG, BROGs share of capital expenditures may not actually be paid by it until the year or years after those expenses were incurred by the operator.

BROG has informed the Trust that its budget for capital expenditures for the Underlying Properties in 2011 is estimated at $13.6 million. Of the $13.6 million, approximately $3.25 million will be attributable to the capital budgets for 2010 and prior years. BROG 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 actual capital expenditures for 2011 could range from $5 million to $35 million.

BROG anticipates 417 projects in 2011. Approximately $8.3 million of the $13.6 million budget is allocable to 38 new wells, including 33 wells scheduled to be dually completed in the Mesaverde and Dakota formations. BROG indicates that five of the new wells are projected to be drilled to Fruitland Coal, Fruitland Sand or Pictured Cliffs formations. Approximately $2 million will be spent on workovers and facilities projects. Of the $3.25 million attributable to the budgets for prior years, approximately $2.45 million is allocable to new wells and the $800,000 balance will be applied to miscellaneous capital projects such as workovers and operated facility projects. Although

Read the The complete Report

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Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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