SAN JUAN BASIN ROYALTY TRUST

The Subject Interests

The Subject Interests consist of working interests, royalty interests, overriding royalty interests and other contractual rights in 151,900 gross (119,000 net) producing acres in San Juan, Rio Arriba and Sandoval Counties of northwestern New Mexico. According to information provided by Cawley, Gillespie and Associates, Inc. (CG&A), the Trust's third party reserve engineers, there were, as of December 31, 2025, 4,325 gross (818.9 net) wells on the properties underlying the Subject Interests, calculated on a well bore basis and not including multiple completions as separate wells, of which approximately 1,039 gross (292.0 net) wells were Multiple Completion Wells, resulting in a total of 5,456 gross (1,149.7 net) completions.

CG&A has informed the Trust that all of the subject acreage is held by production, and even though it has not been fully developed in every formation, CG&A has classified all of such acreage as developed. Production from conventional natural gas wells is primarily from the Pictured Cliffs, Mesaverde, Mancos, and Dakota formations, ranging in depth from 1,500 to 8,500 feet. Additional production is attributable to coal seam reserves in the Fruitland Coal formation.

The Royalty conveyed to the Trust is limited to the base of the Dakota formation, which is currently the deepest significant producing formation under acreage affected by the Royalty. Rights to production, if any, from deeper formations are retained by Hilcorp.

2026 Capital Expenditure Budget

On February 19, 2026, the Trust announced that Hilcorp had provided the Trust with its 2026 capital project plan for the Subject Interests (the “2026 Plan”), and Hilcorp has estimated its 2026 capital expenditures for the Subject Interests to be approximately $14.0 million.

Hilcorp informed the Trust that its 2026 Plan for the Subject Interests includes 32 projects. Approximately $11.5 million of the $14.0 million budget in the 2026 Plan will be allocated to nine new vertical drill projects to be completed in the Mesaverde, Mancos, and Dakota formations and six new horizontal drill projects in the Mancos formation. Hilcorp also informed the Trust that costs associated with the six new horizontal drill projects include drilling costs only. Completion costs for the horizontal wells are expected to be included in Hilcorp’s 2027 capital plan for the Subject Interests, which is expected to be provided to the Trust sometime in the first quarter of 2027. Approximately $2.0 million of the $14.0 million budget of the 2026 Plan will be allocated to 17 projects for recompletions and workovers in the Fruitland Coal and Pictured Cliffs formations, and approximately $0.5 million of the $14.0 million budget will be allocated to facilities projects related to natural gas compression and other facilities projects. Hilcorp further informed the Trust that its 2026 Plan is subject to revision if Hilcorp revises its assumptions underlying the 2026 Plan, and that actual capital costs may vary from these estimates.

The natural gas volumes reported to the Trust by Hilcorp are based on plant residue gas volumes plus equivalent volumes for natural gas liquids. Hilcorp converts one barrel of natural gas liquids to six Mcf of natural gas using industry standards. Production of oil and natural gas and related average sales prices attributable to each of the Subject Interests and the Royalty for each of the two years ended December 31, 2025, were as follows:

Natural Gas(Mcf) · Oil andCondensate(Bbls) · Natural Gas(Mcf) · Oil andCondensate(Bbls)

Production

Subject Interests · 28,412,786 · 32,458 · 22,415,695 · 32,471

Average Price (per Mcf/Bbl) · 2.53 · 55.94 · 2.07 · 68.07

Royalty · 1,954,645 · 17,822 · 2,359,534 · 17,822

Average Price (per Mcf/Bbl) · 4.66 · 55.57 · 1.12 · 68.47

Production costs for natural gas and oil attributable to the Subject Interests for the two years ended December 31, 2025, were as follows:

Total Production Costs (including capital expenses) · 82,014,920 · 82,130,843

Average Production Costs per unit of Production · 2.8669 · 3.6324

Lease Operating Expenses · 33,398,163 · 30,830,580

Average Lifting Cost per unit of Production · 1.1675 · 1.3636

Based on Hilcorp’s reporting methodology, the Trust recognizes production during the month in which the related Royalty Income is paid to the Trust. Royalty Income for a calendar year is based on the actual natural gas and oil production during the period beginning with November of the preceding calendar year through October of the current calendar year. Sales volumes attributable to the Royalty are determined by dividing the net profits by the Trust from the sale of oil and natural gas, respectively, by the prices received for sales of such volumes from the Subject Interests, taking into consideration production taxes attributable to the Subject Interests. Because the oil and natural gas sales attributable to the Royalty are based upon an allocation formula dependent on such factors as price and cost, including capital expenditures, the aggregate sales amounts from the Subject Interests may not provide a meaningful comparison to sales attributable to the Royalty.

• RISKS RELATED TO THE STRUCTURE OF THE TRUST
• The Royalty can be sold and the Trust can be terminated in certain circumstances.
• None of the Trustee, the Trust nor the Unit Holders control the operation or development of the properties underlying the Subject Interests.
• Unit Holders have limited voting rights.
• RISKS RELATED TO OWNERSHIP OF THE TRUST UNITS
• If the Trust cannot meet the New York Stock Exchange continued listing requirements, the NYSE may delist the Trust Units.
• The market price for the Trust Units may not reflect the value of the Royalty held by the Trust.
• The limited liability of Trust Unit Holders is uncertain.
• Financial information of the Trust is not prepared in accordance with GAAP.
• LEGAL, ENVIRONMENTAL, AND REGULATORY RISKS
• The operators of the properties underlying the Subject Interests are subject to extensive governmental regulation.
• Government action, policies or regulations designed to discourage production, reduce demand for, or promote alternatives to oil and natural gas could impact the price of oil and natural gas produced on the properties underlying the Trust’s Subject Interests, directly as intended or through unintended consequences.
• Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in Hilcorp incurring increased costs, additional operating restrictions or delays and fewer potential drilling locations.
• CYBERSECURITY RISKS
• The Trustee may be subject to attempted cybersecurity disruptions from a variety of sources.
• Trust Unit Holders are required to pay U.S. federal income taxes on their share of the Trust’s income, even if they do not receive any cash distributions from the Trust.
• The tax treatment of an investment in Trust Units could be affected by recent and potential legislative changes, possibly on a retroactive basis.
• A portion of any gain recognized on the disposition of the Trust Units could be taxed as ordinary income.
• The Trust generally allocates its items of income, gain, loss and deduction between transferors and transferees of the Trust Units based upon the monthly record date. The IRS may challenge this treatment.
• The Trust has not requested a ruling from the IRS regarding the tax treatment of the Trust. If the IRS were to determine (and be sustained in that determination) that the Trust is not a “grantor trust” for U.S. federal income tax purposes, the Trust could be subject to more complex and costly tax reporting requirements that could reduce the amount of cash available for distribution to Trust Unit Holders.