Compass Bank (the "Trustee") as Trustee of the San Juan Basin Royalty Trust (NYSE:SJT) (the "Trust"), today announced the capital project plan for 2013 as delivered to it by Burlington Resources Oil & Gas Company LP ("Burlington"). Capital expenditures for 2013 for properties subject to the Trust’s royalty interest are estimated to be $28.5 million. Of the $28.5 million, approximately $5 million will be attributable to the capital budgets for 2012 and prior years.
The principal asset of the Trust is a 75% net overriding royalty interest carved out of certain oil and gas leasehold and royalty interests in properties now owned by Burlington (the “Underlying Properties”) located in the San Juan Basin and more particularly in San Juan, Rio Arriba and Sandoval counties of northwestern New Mexico. Burlington is the operator of the majority of the Underlying Properties.
Burlington’s announced 2013 plan for the Underlying Properties includes 412 projects. Approximately $18.2 million of the $28.5 million budget is allocable to 24 new wells, including 18 wells scheduled to be dually completed in the Mesaverde and Dakota formations and two wells that are planned to be completed in all three of the Mesaverde, Mancos Shale and Dakota formations. Approximately $5.4 million will be spent on recompletions and miscellaneous facilities projects. Of the $5 million attributable to the budgets for prior years, approximately $3 million is allocable to 30 new wells and the $2 million balance will be applied to miscellaneous capital projects such as workovers and operated facility projects.
Burlington mentioned that it commenced a horizontal well in the Mancos Shale formation on the Underlying Properties in the fourth quarter of 2012 and expects the first delivery of gas from the well in the first quarter of 2013. This well is designated the Yert 1-H. Burlington indicated that it will continue to assess its program of horizontal drilling but that horizontal Mancos Shale activity is uncertain for 2013.