SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Value Investing
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: S. maltophilia who wrote (78102)9/13/2025 2:13:14 PM
From: E_K_S  Read Replies (1) of 79054
 
I have been eyeing some of these NG/Oil royalty Trusts to secure an income stream. However these too can stop the payments if/when expenses increase, new capital is deployed to expand reserves and/or the price of the underlining commodity falls.

San Juan Basin Royalty Trust (SJT) has been one I have been watching but they continue to be in the arrears and have stopped all payments.

Structure and Payments

The cash flow of a royalty trust is directly dependent on two main factors: the volume of production and the price of the underlying commodity (oil or natural gas). The trust receives income from the operator of the property and, after deducting its own administrative expenses, distributes the remaining net proceeds to unitholders on a regular basis, often monthly. The amount of each distribution can fluctuate significantly because it is tied to these volatile variables.

These trusts are often used for oil or gas fields that are already at or past their production peak, where the infrastructure is already in place. This structure is appealing because it avoids corporate-level taxation, as long as a high percentage (e.g., 90%) of its income is distributed to investors. The income is then taxed at the individual level.

-----------------------------------------------------

My take away NOTHING is certain even the cash flows from a working oil/gas field.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News