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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 59 added, 77 removed, 90 unchanged (60% of the section changed)

12 unchanged sentences

of this information for inclusion in this Annual Report on Form 10-K and the other periodic reports provided by the Trust to the SEC.

Hilcorps process of reconciling actual revenue and severance taxes to previously reported estimates (which the Trust refers to as true-ups) during fiscal years 2018 and 2020 were still occurring and being reported in 2021.

At the beginning of 2021, Hilcorp informed the Trust that planned to refine further its estimating and

reporting processes, and that Hilcorp would review prior periods to ensure greater accuracy and consistency, both for prior periods as well as future reporting periods.

As part of that review process, Hilcorp informed the Trust that it would reverse

and rebook revenue for certain prior periods.

Thus, distributions to the Trust from Hilcorp in any given month in 2021 could be subject to adjustments based upon prior months true-ups and rebooking, plus

The Trustee has evaluated the Trusts internal disclosure controls and procedures as of December 31, 2021, and has

concluded that such disclosure controls and procedures are effective, at the reasonable assurance level

Notes to Financial Statements (Continued)

(as such term is used in Rule 13a-15(f) of the Exchange Act), to ensure that material information received from Hilcorp is gathered on a timely basis to be

included in the Trusts periodic reports and recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.

Additionally, during the quarter ended December 31, 2021, there were no changes to the Trusts internal controls over financial

reporting (as such term is used in Rule 13a-15(f) of the Exchange Act) that materially affected, or are reasonably likely to materially affect, the Trusts internal control over financial reporting.

Because the Trust does not have, nor does the Indenture provide for, officers, a board of directors or an independent audit committee, the Trustee has reviewed neither the Trusts disclosure controls and procedures nor the Trusts internal

control over financial reporting in concert with management, a board of directors or an independent audit committee.

Report on Internal Control over Financial Reporting

PNC Bank, in its capacity as trustee of the Trust, is responsible for

establishing and maintaining adequate internal control over financial reporting.

The Trusts internal control over financial reporting is a process designed under the supervision of the Trustee to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of the Trusts financial statements for external purposes in accordance with a modified cash basis of accounting, which is a comprehensive basis of accounting other than U.S.

accepted accounting principles.

As of December 31, 2021, the Trustee assessed the effectiveness of the Trusts internal control

over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control Integrated Framework , issued by the Committee of Sponsoring Organizations of the

Treadway Commission (2013 Framework).

Hilcorp has informed the Trust that it continues to refine further its estimating and reporting

As part of that review process, Hilcorp informed the Trust that it would reverse and rebook revenue for certain prior periods.

Thus, distributions to the Trust from Hilcorp in any given month may be subject to adjustments for the reversal

and rebooking of prior months revenue, plus interest.

As of December 31, 2022, Hilcorp has informed the Trust that it believes that all prior month actualizations have occurred, and it does not expect to need to report any further

actualizations in future distribution reports.

However, the Trustee continues to engage with Hilcorp regarding its ongoing accounting and

reporting to the Trust, and the Trusts third-party compliance auditors continue to audit payments made by Hilcorp to the Trust, inclusive of sales revenues, production costs, capital expenditures, adjustments, actualizations, and recoupments.

The Trusts auditing process has also included detailed analysis of Hilcorps pricing and rates charged.

As previously disclosed in the Trusts filings, these revenues and costs (along with all costs) are the subject of the

Trusts ongoing comprehensive audit process by our professional consultants and outside counsel to ensure full compliance with all the underlying operative Trust agreements and evaluating all available potential remedies in the event there is

evidence of non-compliance.

The Trustee has evaluated the Trusts internal disclosure

controls and procedures as of December 31, 2022, and has concluded that such disclosure controls and procedures are effective, at the reasonable assurance level (as such term is used in Rule

13a-15(f) of the Exchange Act), to ensure that material information received from Hilcorp is gathered on a timely basis to be included in the Trusts periodic reports and recorded, processed, summarized

and reported within the time periods specified in the SECs rules and forms.

Additionally, during the quarter ended

December 31, 2022, there were no changes to the Trusts internal controls over financial reporting (as such term is used in Rule 13a-15(f) of the Exchange Act) that materially affected, or are

reasonably likely to materially affect, the Trusts internal control over financial reporting.

Because the Trust does not have, nor does the Indenture provide for, officers, a board of directors or an independent audit committee, the Trustee

has reviewed neither the Trusts disclosure controls and procedures nor the Trusts internal control over financial reporting in concert with management, a board of directors or an independent audit committee.

Trustees Report on Internal Control over Financial Reporting

PNC Bank, in its capacity as trustee of the Trust, is responsible for establishing and maintaining adequate internal control over financial

The Trusts internal control over financial reporting is a process designed under the supervision of the Trustee to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Trusts

financial statements for external purposes in accordance with a modified cash basis of accounting, which is a comprehensive basis of accounting other than U.S.

generally accepted accounting principles.

As of December 31, 2022, the Trustee assessed the effectiveness of the Trusts internal control over financial reporting based on

the criteria for effective internal control over financial reporting established in Internal Control Integrated Framework , issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on the assessment, the Trustee determined that the Trust maintained effective internal control over financial reporting as of December 31, 2022, based on those criteria.

6 unchanged sentences

officers and employees of the Trustee.

The Trustee is a corporate trustee which may be removed, with or without cause, at a meeting of the Unit Holders, by the affirmative vote of the holders of a majority of all the Units then outstanding.

The Trustee is a corporate trustee that may be removed, with or without cause, at a meeting of the Unit Holders, by the affirmative vote of the holders of a majority of all the Units then outstanding.

Delinquent Section 16(a) Reports

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Security Ownership of Certain Beneficial

The following table sets forth as of March 31, 2022, information with respect to the Unit Holders who were known to the

Trustee to be the beneficial owners of more than five percent (5.0%) of the outstanding Units.

Name and Address of Beneficial Owner

Number of Units

Beneficially Owned

Nevada Capital Corporation Ltd.

20 Eglinton Avenue West, Suite 1900

Toronto ON, Canada M4R 1K8 (1)

The K2 Principal Fund, L.P.

2 Bloor St West, Suite 801

Toronto, Ontario, M4W 3E2 (2)

This information was provided in a Schedule 13G filed with the SEC on December 20, 2018 by Nevada Capital

Corporation, Ltd., and which stated that Nevada Capital Corporation, Ltd.

beneficially holds such Units on behalf of its investment advisory clients and is deemed to have sole voting power with respect to, and the sole power to dispose or to direct

the disposition of, 2,415,000 Units.

This information was provided in a Schedule 13G filed with the SEC on January 18, 2022 by Shawn Kimel

Investments, Inc., an Ontario corporation (SKI), The K2 Principal Fund, L.P., an Ontario limited partnership (the Fund), K2 Genpar 2017 Inc., an Ontario corporation and the General Partner to the Fund (Genpar

2017), and K2 & Associates Investment Management Inc., an Ontario corporation (K2 & Associates).

Together SKI, the Fund, Genpar2017, and K2 & Associates are the Reporting Persons.

The Fund is the record

holder of 2,339,968 Units, and each of the Reporting Persons may be deemed to be beneficial owners of the 2,339,968 Units that are held by the Fund.

Daniel Gosselin is vice president of SKI, Secretary of GenPar 2017 and President of K2

& Associates, and exercises ultimate voting and investment powers over the 2,339,968 Units that are held of record by the Fund.

Security Ownership of Trustee

serves as agent and custodian for certain customer accounts.

As of March 31, 2021, BBVA USA could be deemed to beneficially own 40,000 Units related to these accounts, or less than one percent of the outstanding Units.

BBVA USA has no

voting or disposal power over the 40,000 Units.

BBVA USA does not have a pecuniary interest in any of these Units.

Security Ownership of

PNC Bank serves as agent and custodian for certain customer accounts.

As of March 31, 2022, PNC

Bank could be deemed to beneficially own 40,000 Units related to these accounts, or less than 1% of the outstanding Units.

PNC Bank has no voting or disposal power over the 40,000 Units.

PNC Bank does not have a pecuniary interest in any of these

Changes in Control

The Trustee knows of no arrangement, including any pledge by any person of Units of the Trust, the operation of which may at a subsequent date

result in a change of control of the Trust.

Trustee knows of no arrangement, including any pledge by any person of Units of the Trust, the operation of which may at a subsequent date result in a change of control of the Trust.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Trust has no directors or executive officers;

therefore, no determination been made relative to director

therefore, no determination has been made relative to director

independence.

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This category includes fees related to audit and attest services not required by statute or regulations and consultations concerning financial accounting and reporting standards.

Tax Fees consist of fees for professional services billed for tax compliance, tax advice and

tax planning.

These services include assistance regarding federal and state tax compliance.

All Other Fees consist of fees billed for

products and services other than the services reported above.

Tax Fees consist of fees for professional services billed for tax compliance, tax advice and tax planning.

These services include assistance

regarding federal and state tax compliance.

All Other Fees consist of fees billed for products and services other than the services

reported above.

The Trust has no directors or executive officers.

Accordingly, the Trust

does not have an audit committee and there are no audit committee pre-approval policies or procedures relating to services provided by the Trusts independent accountants.

Pursuant to the terms of the

Indenture, the Trustee engages and approves all services rendered by the Trusts independent accountants.

Accordingly, the Trust does not have an audit committee, and there are

no audit committee pre-approval policies or procedures relating to services provided by the Trusts independent accountants.

Pursuant to the terms of the Indenture, the Trustee engages and approves all

services rendered by the Trusts independent accountants.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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of this Annual Report on Form 10-K:

Report of Independent Registered Public

Accounting Firm

Report of Independent Registered Public Accounting Firm

Statements of Assets, Liabilities and Trust Corpus

2 unchanged sentences

Notes to Financial Statements

Financial Statement Schedules

statement schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the financial statements or notes thereto.

Statement Schedules

Financial statement schedules are omitted because of the absence of conditions under which they are required or

because the required information is given in the financial statements or notes thereto.

San Juan Basin Amended and Restated Royalty Trust Indenture, dated December

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Certification required by Rule 13a-14(a), dated March

31, 2022, by James R.

Wilharm, Senior Vice President and Director of Trust Real Estate Services of PNC Bank, the Trustee of the Trust.**

31, 2023, by Ross C.

Durr, Senior Vice President and Mineral Interest Director of PNC Bank, the Trustee of the Trust**

Certification required by Rule 13a-14(b), dated March

31, 2022, by James R.

Wilharm, Senior Vice President and Director of Trust Real Estate Services of PNC Bank, on behalf of PNC Bank, the Trustee of the Trust.***

31, 2023, by Ross C.

Durr, Senior Vice President and Mineral Interest Director of PNC Bank, on behalf of PNC Bank, the Trustee of the Trust***

Independent Petroleum Engineers Report prepared by Cawley, Gillespie & Associates, Inc., dated March 3, 2023**

5 unchanged sentences

be signed on its behalf by the undersigned, thereunto duly authorized.

PNC BANK, NATIONAL ASSOCIATION, AS TRUSTEE OF THE

PNC BANK, NATIONAL ASSOCIATION, AS

TRUSTEE OF THE

SAN JUAN BASIN ROYALTY TRUST

Senior Vice President

Director of Trust Real Estate Services

Senior Vice President and

Mineral Interest

March 31, 2023

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures