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San Juan Basin Royalty Trust 2021 Third Quarter TO OUR UNIT HOLDERS We are pleased to present the 2021 3rd Quarter Report ( this " Report " ) of the San Juan Basin Royalty Trust ( the " Trust " ) to the holders ( the " Unit Holders " ) of units of beneficial interest in the Trust ( the " Units " ) . The principal asset of the Trust is a 75 % net overriding royalty interest ( the " Royalty " ) that is carved out of certain oil and gas leasehold and royalty interests in properties located in the San Juan Basin of New Mexico ( the " Subject Interests " ) . The Subject Interests are owned by Hilcorp San Juan L.P. ( " Hilcorp " ) . On June 1 , 2021 , The PNC Financial Services Group , Inc. ( " PNC " ) announced that it had completed the purchase of BBVA USA Bancshares , Inc. , a financial holding company , including its U.S. banking subsidiary , BBVA USA , an Alabama - chartered bank and trustee of the Trust ( " BBVA USA " ) . On October 8 , 2021 , PNC Bank , an indirect wholly owned subsidiary of PNC , succeeded BBVA USA as the trustee of the Trust following BBVA USA's merger with and into PNC Bank . Royalty income distributed by Hilcorp to the Trust , which consists of monthly net proceeds attributable to the Royalty , was approximately $ 6.1 million for the three months ended September 30 , 2021. There was no Royalty income during the three months ended September 30 , 2020 due to excess production costs from the April 2020 production month . The average natural gas price increased from $ 1.46 per Mcf for the three months ended September 30 , 2020 to $ 2.74 per Mcf for the three months ended September 30 , 2021. Production of natural gas from the Subject Interests increased from 5,786,304 Mcf for the three months ended September 30 , 2020 to 6,410,955 Mcf for the three months ended September 30 , 2021 . Distributable income , which is the amount that the Trust distributes to the Unit Holders from the Royalty income less the amount of expenses paid by the Trust and any changes in cash reserves , was $ 5.7 million ( $ 0.121735 per Unit ) for the three months ended September 30 , 2021. There was no distributable income during the three months ended September 30 , 2020 . Based on 46,608,796 Units outstanding , the per - Unit distributions during the third quarter of 2021 were as follows : Interest income was lower for the three months ended September 30 , 2021 , as compared to the same period in 2020 , due primarily to lower yields on short - term investments held by the Trust . General and administrative expenses increased approximately 33 % for the three months ended September 30 , 2021 , as compared to the three months ended September 30 , 2020. The increase in general and administrative expenses was primarily attributable to differences in timing in the receipt and payment of certain expenses by the Trust and increased legal expenses during the transition from BBVA to PNC Bank as the Trustee . Total cash reserves were $ 1.0 million as of September 30 , 2021. The Trustee does not anticipate any increases to the cash reserve above a level of $ 1.0 million in 2021 , although it cannot guarantee that the Trustee will not increase such cash reserves in the future . Hilcorp's capital expenditures decreased approximately $ 166,000 for the three months ended September 30 , 2021 , compared to the three months ended September 30 , 2020. The decrease is due primarily to a credit as a result of true - ups for the January through April 2021 production months . Hilcorp's 2021 capital project plan for the Subject Interests calls for total capital spending of $ 0.3 million for fiscal 2021 . Royalty income for the three months ended September 30 , 2021 is associated with oil and natural gas production during May through July 2021 from the Subject Interests . Production of oil and natural gas and related average sales prices attributable to each of the Subject Interests and the Royalty for the three months ended September 30 , 2021 and 2020 were as follows : Production For the Three Months Ended September 30 , 2021 2020 Natural Gas ( Mcf ) Oil and Condensate ( Bbls ) Natural Gas ( Mcf ) Oil and Condensate ( Bbls ) July August September Quarter Total $ 0.084740 0.000000 0.036995 $ 0.121735 Subject Interests Royalty 6,410,955 13,935 5,786,304 14,195 Average Price ( per Mcf / Bbl ) 2,643,866 9,266 946,233 $ 2.74 $ 58.92 6,245 $ 1.46 $ 28.09