Glenbrook Capital Management, which holds 724,480 units of the New York Stock Exchange-listed San Juan Royalty Trust (NYSE: TRC) in the United States, has asked Argent Trust Company, the trust’s officer, for more detailed disclosure of expenses, capital spending and liquidity.
The letter, dated Sept. 10, 2026, follows a telephone conversation between Glenbrook and Argent representatives Glynnis Elo and Nancy Willis. Glenbrook said the discussion reinforced its view that unitholders need more information about the trust’s financial position, operational developments and measures to protect their interests.
Glenbrook said it recognizes that Argent operates under the Trust Indenture, that Argent inherited a number of the issues, and that Hilcorp controls many operating decisions. The letter said Glenbrook is focused on how Argent is exercising the rights and responsibilities it has under the trust documents.
The letter said the suspension of distributions, the accumulated excess production cost balance, recent capital expenditures and the trust’s reliance on its credit facility are serious matters requiring more communication and transparency.
Expense disclosure request#
Glenbrook asked Argent to provide a breakdown of the trust’s general and administrative expenses, identifying amounts paid to Argent or its affiliates. It also requested an explanation of the roughly $976,000 year-over-year decrease in those expenses, including transition expenses, timing differences and other material components.
The letter said current disclosures are less detailed than those Argent provides for two other trusts it administers. Permian Basin Royalty Trust divides general and administrative expenses into four categories:
- trustee fees
- professional fees
- unitholder service fees
- other expenses
Sabine Royalty Trust includes a separately audited statement of fees and expenses paid to Argent, identifying trustee fees, escrow-agent fees and a bonus fee, and quantifies year-over-year changes in legal and professional fees, check stub data exchange (CDEX) services, courier expenses and postage.
Glenbrook said trustee-related costs must remain proportionate to the trust’s circumstances and that greater disclosure would allow unitholders to evaluate cost controls.
Audit adjustment and trustee comparison#
Glenbrook also asked for more information about a joint interest audit covering 2017 through 2020 and a resulting prior-period adjustment of about $3.47 million, of which about $2.60 million was net negative to the trust. The audit period predates Argent’s appointment, but the adjustment was recorded during Argent’s tenure and has materially contributed to the trust’s current financial position, the letter said.
Glenbrook said Argent’s predecessor, PNC, had been aggressive with Hilcorp and corrected mistakes, resulting in a positive outcome for the trust. In September 2023, PNC secured a payment of $1,037,093 from Hilcorp that included interest on an underpayment, according to the letter.
Glenbrook asked Argent to describe the review it undertook and, if Argent concluded no viable recovery avenue existed, to explain why.
Capital spending questions#
Glenbrook said the economics of Hilcorp’s recent capital program are difficult to reconcile with the prevailing natural gas price environment and the trust’s existing excess production cost balance. Five vertical wells have been removed from the 2026 plan, and completion reporting for the remaining six horizontal wells has been deferred to the first quarter of 2027, the letter said.
Glenbrook asked Argent to identify what information, audit, consultation, objection or other rights it has under the trust documents and governing agreements with respect to Hilcorp’s capital expenditures, including under the Prudent Operator standard, and which of those rights Argent has actually exercised. It also asked whether Argent has independently evaluated the economic rationale for the expenditures and their expected benefit to the trust, whether Argent has raised concerns with Hilcorp, and whether any correspondence is available to unitholders.
Liquidity and credit facility#
The trust’s liquidity position is an immediate concern, Glenbrook said. Argent has drawn on the trust’s $2.0 million Texas Bank credit facility, which is scheduled to mature on May 21, 2027, and the accumulated excess production cost balance creates a substantial hurdle before distributions can resume.
Glenbrook asked Argent to describe its liquidity plan through and beyond the May 21, 2027 maturity. Glenbrook said it would consider participating in a financing alongside other unitholders if Argent presents a viable plan.
