San Juan Basin Royalty Trust (NYSE:SJT) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On September13, 2017, Compass Bank, in its capacity as Trustee of the San Juan Basin Royalty Trust (the “Trust”), entered into a compromise settlement agreement (“Settlement Agreement”) with Burlington Resources Oil& Gas Company LP (“Burlington Resources”) through its general partner, BROG GP LLC (“BROG”, and together with Burlington Resources, “Burlington”), each a wholly-owned subsidiary of ConocoPhillips, with respect to the lawsuit that the Trust filed against Burlington on July31, 2014 (the “2014 Litigation”). Burlington previously owned certain oil and gas interests in the San Juan Basin that are burdened by the Trust, which interests ConocoPhillips sold to Hilcorp San Juan, L.P. in a transaction effective as of January1, 2017. The Settlement Agreement provides for Burlington to pay the Trust $7.5 million to resolve the 2014 Litigation and all disputed and/or unresolved audit exceptions asserted by the Trust for the audit years January1, 2007 through December31, 2016.
The Settlement Agreement includes a mutual release of each party and its affiliates for any claims or damages arising out of or related to any acts, events or omissions occurring prior to January1, 2017, including with respect to any claims asserted by the Office of Natural Resource Revenue (the “ONRR”) against Burlington and/or ConocoPhillips to pay additional royalties for production for periods prior to January1, 2017. to the Settlement Agreement, the Trust will be indemnified for any liability relating to the ONRR claims for periods prior to January1, 2017 and Burlington has fully released the Trust from any such claims.
The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Settlement Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
On September18, 2017, the Trust issued a press release, a copy of which is attached hereto as Exhibit 99.1, with respect to the Trust’s entry into the Settlement Agreement.
The 2014 Litigation was dismissed with prejudice on September14, 2017. The Trust received the $7.5 million settlement payment on September15, 2017. The settlement proceeds will be included in the September declaration of cash distribution payable October16, 2017, to unit holders of record as of September29, 2017.
| Item 1.01. | Financial Statements and Exhibits. |
The following exhibits are filed in accordance with the provisions of Item601 of Regulation S-K:
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SAN JUAN BASIN ROYALTY TRUST ExhibitEX-10.1 2 d451934dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 COMPROMISE SETTLEMENT AGREEMENT This Compromise Settlement Agreement (this “Agreement”) is executed on one hand by Compass Bank (“Trustee”),…To view the full exhibit click here
About San Juan Basin Royalty Trust (NYSE:SJT)
San Juan Basin Royalty Trust is an express trust. The principal asset of the Trust is Royalty. Its underlying properties include the working, royalty and other oil and natural gas interests owned by Southland Royalty Company in properties located in the San Juan Basin of northwestern New Mexico. The Trust does not operate the Underlying Properties and does not carry on any business activity. The Trust is a widely held fixed investment trust (WHFIT) and is classified as a non-mortgage widely held fixed investment trust (NMWHFIT) for federal income tax purposes. Burlington Resources Oil & Gas Company LP is the principal operator of the Underlying Properties. The Trustee of the Trust is Compass Bank, which is a subsidiary of Banco Bilbao Vizcaya Argentaria, S.A.
