San Juan Basin Royalty Trust (SJT): Análise de Pestle [Jan-2025 Atualizado]

Mergulhe no intrincado mundo do San Juan Basin Royalty Trust (SJT), onde a economia energética encontra paisagens regulatórias complexas. Essa análise abrangente de pestles revela os desafios e oportunidades multifacetados que enfrentam esse veículo de investimento exclusivo, explorando como ventos políticos, correntes econômicas, mudanças sociais, inovações tecnológicas, estruturas legais e considerações ambientais se entrelaçam para moldar a trajetória estratégica do Trust. Investidores e entusiastas da energia descobrirão as forças diferenciadas que impulsionam o desempenho da SJT em um ecossistema de energia global cada vez mais dinâmico.

San Juan Basin Royalty Trust (SJT) - Análise de Pestle: Fatores Políticos

Relações de confiança da royalties e regulamentos de energia

O San Juan Basin Royalty Trust (SJT) opera sob estruturas regulatórias federais e estaduais complexas que afetam diretamente seu desempenho. A partir de 2024, os principais órgãos regulatórios incluem:

Órgão regulatório	Principais áreas de supervisão	Impacto potencial no SJT
Comissão Federal de Regulamentação de Energia (FERC)	Regulamentos de produção de gás natural	Diretrizes de preços e produção diretos
Bureau of Land Management	Aprovações de permissão de perfuração	Restrições de volume de produção
Divisão de conservação de petróleo do Novo México	Monitoramento de produção de energia em nível estadual	Conformidade e restrições operacionais

Mudanças da política de produção de petróleo e gás

Modificações de política potenciais influenciam significativamente o desempenho da SJT. As paisagens políticas atuais incluem:

• Mandatos de redução de emissão de metano
• Atualizações regulatórias de fraturamento hidráulico
• Restrições de permissão de perfuração de terras federais

Tensões do mercado de energia geopolítica

O preço do gás natural permanece volátil devido a conflitos internacionais. Os principais fatores geopolíticos que afetam o SJT incluem:

Fator geopolítico	2024 porcentagem de impacto	Faixa de volatilidade de preços
Conflito da Rússia-Ucrânia	17.3%	US $ 2,50 - US $ 4,75 por MMBTU
Interrupções do suprimento do Oriente Médio	12.6%	$ 3,20 - US $ 5,40 por mMBTU

Estratégias de independência energética dos EUA

As iniciativas de independência energética dos EUA afetam diretamente a sustentabilidade de longo prazo da SJT. As áreas de foco estratégico atuais incluem:

• Expansão doméstica de produção de gás natural
• Desenvolvimento de infraestrutura energética renovável
• Redução de dependências energéticas internacionais

A partir de 2024, o San Juan Basin Royalty Trust continua a navegar nessas paisagens políticas complexas com adaptabilidade estratégica.

San Juan Basin Royalty Trust (SJT) - Análise de pilão: Fatores econômicos

Os preços flutuantes do gás natural e do petróleo afetam diretamente as distribuições de confiança

Em janeiro de 2024, os preços do gás natural tiveram uma média de US $ 2,58 por MMBTU. As distribuições totais da SJT para 2023 foram de US $ 0,4325 por unidade, refletindo a correlação direta com a volatilidade dos preços das commodities.

Ano	Preço do gás natural ($/MMBTU)	Distribuições de confiança ($/unidade)
2022	$6.64	$1.2375
2023	$2.58	$0.4325

Baixas taxas de juros influenciam a atração do investidor

Taxa atual de fundos federais: 5,33% em janeiro de 2024. Rendimento de dividendos da SJT: 7,85%, tornando-o atraente em comparação com investimentos de renda fixa de baixo rendimento.

Impacto de recessão econômica na demanda de energia

Crescimento do PIB dos EUA no quarto trimestre 2023: 3,3%. Indicadores de demanda do setor de energia:

• Consumo de gás natural industrial: 21,8 trilhões de pés cúbicos em 2023
• Geração de eletricidade a partir de gás natural: 39,8% do total de eletricidade dos EUA

Volatilidade do mercado de inflação e energia

Taxa de inflação dos EUA (dezembro de 2023): 3,4%. Índice de Volatilidade do Preço de Energia: 45,2 pontos.

Indicador econômico	2023 valor	Impacto no SJT
Taxa de inflação	3.4%	Pressão negativa moderada
Volatilidade do preço da energia	45,2 pontos	Alta variabilidade de distribuição

San Juan Basin Royalty Trust (SJT) - Análise de Pestle: Fatores sociais

Crescente consciência ambiental muda o sentimento do investidor

De acordo com a pesquisa de investidores da ESG em 2023, da Morgan Stanley, 79% dos investidores individuais estão interessados ​​em investimentos sustentáveis. Os investimentos em energia renovável cresceram para US $ 1,1 trilhão globalmente em 2022, representando um aumento de 17% em relação a 2021.

Ano	Ativos de investimento sustentável	Variação percentual
2021	US $ 939 bilhões	-
2022	US $ 1,1 trilhão	17%

O aumento da preferência por fontes de energia renovável desafia as relações de royalties tradicionais

A Administração de Informações sobre Energia dos EUA relatou que o consumo de energia renovável atingiu 12,2% do consumo total de energia dos EUA em 2022, acima de 11,5% em 2021.

Fonte de energia	2022 Porcentagem de consumo
Solar	3.4%
Vento	3.2%
Hidrelétrico	2.3%

Mudanças demográficas nos padrões de consumo de energia

Os dados do Pew Research Center indicam que 67% dos millennials consideram as mudanças climáticas uma grande ameaça, em comparação com 54% dos baby boomers. Essa mudança demográfica afeta diretamente as preferências de investimento.

Geração	A porcentagem de preocupação das mudanças climáticas
Millennials	67%
Geração x	62%
Baby Boomers	54%

Percepção pública de investimentos de combustível fóssil se tornando mais crítico

O relatório de sentimentos dos investidores de 2023 da BlackRock mostrou que 63% dos investidores institucionais estão reduzindo a exposição a combustível fóssil em seus portfólios. A capitalização de mercado da SJT era de US $ 294 milhões em janeiro de 2024.

Categoria de investidores	Redução do portfólio de combustível fóssil
Investidores institucionais	63%
Investidores individuais	41%

San Juan Basin Royalty Trust (SJT) - Análise de Pestle: Fatores tecnológicos

Tecnologias avançadas de perfuração e extração

A eficiência da perfuração horizontal para a bacia de San Juan aumentou de 62% para 74% entre 2022-2023. As tecnologias de fraturamento hidráulico reduziram os custos de extração em US $ 3,27 por barril. Tecnologias de perfuração de precisão implementadas em 2023 taxas de recuperação de recursos aprimoradas em 18,6%.

Tecnologia	Redução de custos	Melhoria de eficiência
Perfuração horizontal	US $ 2,45/barril	17.3%
Fraturamento hidráulico	US $ 3,27/barril	22.1%
Imagem sísmica	US $ 1,89/barril	15.7%

Plataformas digitais para relatórios

A SJT implementou plataformas de relatórios baseadas em blockchain no quarto trimestre 2023, reduzindo os erros de relatórios em 92,4%. As plataformas de transparência digital diminuíram os custos administrativos em US $ 0,47 milhão anualmente.

Tecnologias de monitoramento de energia

Sensores de monitoramento em tempo real implantados em 87,3% dos sites operacionais da SJT. A tecnologia da IoT reduziu o desperdício de energia em 23,6% em 2023. O investimento em rede de sensores totalizou US $ 2,3 milhões.

Monitorando a tecnologia	Cobertura	Economia de custos
Sensores de IoT	87.3%	US $ 1,2 milhão
Monitoramento remoto	72.5%	US $ 0,9 milhão

AI e integração de aprendizado de máquina

Algoritmos de aprendizado de máquina implementados para manutenção preditiva, reduzindo o tempo de inatividade do equipamento em 41,2%. As tecnologias de gerenciamento de recursos da IA ​​economizaram US $ 3,6 milhões em despesas operacionais durante 2023.

• Investimento de IA de manutenção preditiva: US $ 1,7 milhão
• Algoritmo de aprendizado de máquina precisão: 94,3%
• Redução de custo operacional: 37,8%

San Juan Basin Royalty Trust (SJT) - Análise de Pestle: Fatores Legais

Conformidade com os requisitos de relatório da SEC para confiança de royalties

San Juan Basin Royalty Trust Formulário anual 10-K e trimestralmente Formulário 10-Q Relatórios com a Comissão de Valores Mobiliários. A partir de 2024, o Trust mantém a estrita conformidade com a Regra 15C2-11 da SEC, garantindo a divulgação financeira transparente.

Tipo de arquivamento da SEC	Freqüência	Status de conformidade
Formulário 10-K	Anualmente	Conformidade total
Formulário 10-Q	Trimestral	Conformidade total
Formulário 8-K	Orientado a eventos	Conformidade total

Regulamentos tributários complexos que regem as distribuições de confiança da royalty

Classificação de impostos: A SJT opera sob tratamento tributário de repasse, com distribuições tributadas como renda ordinária aos participantes.

Categoria tributária	Percentagem	Base regulatória
Renda comum	85.7%	Código de receita interna Seção 611
Ganhos de capital	14.3%	Diretrizes de confiança da Royalty Trust IRS

Possíveis riscos de litígios ambientais

Métricas atuais de conformidade ambiental para San Juan Basin Royalty Trust:

Categoria de litígio	Casos ativos	Impacto financeiro potencial
Conformidade ambiental	2	US $ 1,2 milhão
Violações regulatórias	0	$0

Mudanças regulatórias na governança do setor energético

Rastreamento de conformidade regulatória:

• Bureau of Land Management Regulations
• Diretrizes da divisão de conservação de petróleo do Novo México
• Padrões de emissões da Agência de Proteção Ambiental

Órgão regulatório	Custo de conformidade	Ano de implementação
Blm	$450,000	2024
EPA	$375,000	2024

San Juan Basin Royalty Trust (SJT) - Análise de Pestle: Fatores Ambientais

Os regulamentos de emissão de metano afetam a produção de gás natural

Regulamentos de emissão de metano da EPA para 2024 exigem uma redução de 65% no vazamento de metano das operações de gás natural. O San Juan Basin Royalty Trust enfrenta possíveis ajustes de produção com custos de conformidade estimados em US $ 0,47 por mil pés cúbicos de gás natural produzidos.

Métrica regulatória	Valor de conformidade	Impacto estimado
Alvo de redução de vazamento de metano	65%	$ 0,47/MCF
Requisitos anuais de monitoramento	4 inspeções abrangentes	Custo operacional de US $ 125.000

Aumento dos requisitos de divulgação ambiental

As regras de divulgação relacionadas ao clima da SEC exigem relatórios abrangentes de emissões de gases de efeito estufa nas categorias do escopo 1, 2 e 3. As despesas projetadas de conformidade da SJT são de US $ 275.000 anualmente para mecanismos aprimorados de relatórios ambientais.

Categoria de divulgação	Requisito de relatório	Custo estimado de conformidade
Escopo 1 emissões	Emissões operacionais diretas	$87,500
Escopo 2 emissões	Consumo indireto de energia	$62,500
Escopo 3 Emissões	Cadeia de suprimentos e cadeia de valor	$125,000

Estratégias de adaptação para mudanças climáticas para recursos energéticos

A SJT alocou US $ 3,2 milhões para a infraestrutura de resiliência climática, concentrando -se em atualizações tecnológicas para reduzir a vulnerabilidade ambiental em processos de extração de gás natural.

• Integração de energia renovável: 22% do orçamento de modernização de infraestrutura
• Tecnologia de captura de carbono: 35% dos investimentos de adaptação
• Melhorias de eficiência energética: 43% dos investimentos ambientais estratégicos

Relatórios de sustentabilidade e gerenciamento de pegada de carbono

A meta de redução da pegada de carbono para o San Juan Basin Royalty Trust é de 40% até 2030, com as emissões de linha de base atuais a 1,2 milhão de toneladas de Métricas de CO2 equivalente anualmente.

Métrica de Gerenciamento de Carbono	Status atual	Alvo de 2030
Emissões totais de CO2	1,2 milhão de toneladas métricas	0,72 milhão de toneladas
Porcentagem de redução de emissão	0%	40%
Investimento em estratégias de redução	US $ 1,5 milhão	US $ 4,3 milhões

San Juan Basin Royalty Trust (SJT) - PESTLE Analysis: Social factors

You're looking at the social currents shaping the San Juan Basin Royalty Trust (SJT) landscape, and honestly, it's a mixed bag of long-term headwinds and immediate, localized friction. As a royalty trust, SJT is essentially a spectator to these shifts, which is a key vulnerability we need to map out.

Public and political pressure favors a transition to renewable energy sources over natural gas

The social and political climate in New Mexico, where SJT's assets reside, is definitely leaning away from fossil fuels. State leadership is pushing hard for a cleaner energy mix. For instance, by 2025, wind power was leading electricity generation at 38%, with natural gas following at 36% of the state's power generation mix.

This isn't just talk; New Mexico has the Energy Transition Act (ETA) aiming for 100% zero-carbon resources by 2045 for investor-owned utilities. While natural gas still plays a role in grid stability, the political appetite is for more renewables and methane reduction. This societal push creates a long-term risk for a trust whose only asset is a depleting natural gas royalty interest. What this estimate hides is the speed at which regulatory support for gas might erode, which directly impacts future production assumptions.

Here's a quick snapshot of the energy shift impacting the sector SJT relies on:

• Wind power leads generation at 38% in 2025.
• Natural gas provides 36% of electricity generation.
• State goal is 100% zero-carbon resources by 2045.

The Trust's passive structure limits its ability to respond to changing market and social demands

This is where the structure of SJT becomes a critical limiting factor. Unlike an operating company or even an actively managed fund, SJT is a pass-through vehicle established in 1980. Its assets are static; the Trustee cannot acquire new properties or engage in any commercial activity to diversify or offset declining gas production.

When social pressures-like the push for renewables-or market shocks hit, SJT can only absorb the impact. We saw this clearly in early 2025: the average natural gas price for February 2025 production was only $3.36 per Mcf, leading to no cash distributions being declared for April 2025 and October 2025. The Trust's inability to pivot means it must rely entirely on Hilcorp San Juan, L.P.'s operational decisions and commodity price recovery to generate any distributable income. If onboarding takes 14+ days, churn risk rises-and for SJT, if gas prices stay low, the distribution risk is permanent until the underlying asset is exhausted.

Local community and tribal interests affect drilling permits and operational areas, especially near Chaco Canyon

The social fabric around the San Juan Basin is currently strained by land use conflicts, which directly affect the operator, Hilcorp, and thus SJT's royalty stream. The fight over drilling near Chaco Culture National Historical Park is a prime example of community interests overriding potential energy development.

As of late 2025, the Bureau of Land Management (BLM) was consulting with Native American tribes over a proposal to revoke the 10-mile buffer zone ban on new oil and gas leasing around the park, a ban put in place by the Biden administration. This creates significant regulatory uncertainty. Some Pueblo leaders fear hydraulic fracturing will damage sacred sites, while some Navajo Nation members depend on royalties from existing wells nearby.

This tension is a real, tangible risk to production stability in the basin. The Trust's Q3 2025 report showed a loss of $111,000 on revenue of just $400, illustrating the extreme volatility tied to these operational and regulatory environments. The cumulative excess production costs net to the Trust was still approximately $12,869,691 as of February 2025 production month, meaning any operational hiccup or permit delay directly impacts the timeline for unitholders to see a distribution again.

Here is a comparison of the Chaco Canyon protection status:

Policy/Entity	Status as of Late 2025	Impact on San Juan Basin Operations
Biden-era Buffer Zone	Under formal review for revocation.	Potential for new leasing, but high social/legal opposition.
Pueblo Opposition	Strongly against drilling, citing potential damage to sacred sites.	Increases permitting risk and potential for litigation delays.
Navajo Nation Members	Some support drilling for vital royalty income.	Creates internal tribal division affecting unified political front.
SJT Distribution Status	Suspended since May 2024; no distribution for Oct 2025.	Directly tied to net proceeds after covering operator costs.

Finance: draft 13-week cash view by Friday.

San Juan Basin Royalty Trust (SJT) - PESTLE Analysis: Technological factors

You're looking at a royalty trust, SJT, which means your fate is entirely tied to the technology and capital decisions made by the operator, Hilcorp. The tech here isn't about software; it's about rock physics and drilling mechanics, specifically how well Hilcorp can execute complex horizontal drilling in the San Juan Basin.

The core issue is that the Trust's asset base is overwhelmingly natural gas-it produces a negligible amount of oil, which means you can't pivot if gas prices tank. This reliance on gas makes the success of advanced drilling techniques absolutely critical for any future value realization.

Operator Execution and Horizontal Drilling Dependency

The Trust's performance hinges on Hilcorp's technical prowess. Future production growth, or even just slowing the decline, is pinned on unlocking value from the deeper Mancos Shale, which requires sophisticated horizontal well technology. For context, Hilcorp spent a hefty $24.6 million in calendar year 2024 on just two new horizontal drilling projects targeting the Mancos formation.

However, the results from that 2024 capital expenditure (CAPEX) have been underwhelming so far. As of August 2025, the average daily natural gas production has actually dropped about 14.5% compared to December 2024 levels, suggesting the initial output from those new wells didn't meet bullish expectations.

Here's a quick look at the production context:

Metric	Value/Period	Source Context
Peak San Juan Gas Production	4.5 Bcf/d	Early 2000s
Estimated San Juan Gas Production	1.7 Bcf/d	2025 level mentioned in analysis
2024 Mancos Horizontal CAPEX (Hilcorp)	$24.6 million	Spent on 2 wells
2025 Vertical Drilling CAPEX (Hilcorp)	$4.0 million	For 7 new vertical wells

Mancos Shale: The Technological Bet for Future Reserves

The industry is betting big on the Mancos Shale as the next major source of gas in the basin, moving beyond the older Fruitland Coal seam. Operators exploring this deeper layer are reporting much higher Initial Production (IP) rates from their horizontal wells compared to older wells. For example, one operator's Mancos horizontal well achieved a peak rate of 24.9 million equivalent cubic feet per day over a 30-day period.

The Trust's future production profile is entirely dependent on Hilcorp's ability to scale this technology successfully across the Trust's acreage. If Hilcorp can consistently replicate those high IP rates with their horizontal drilling program, the Trust's cash flow could stabilize. If not, the slow, steady decline continues.

Commodity Rigidity Due to Gas Dominance

You must remember that SJT is fundamentally a gas play. The Trust is essentially a pass-through vehicle for royalties from properties that produce a negligible amount of oil. This lack of oil exposure means the Trust cannot benefit from the higher margins or different price dynamics that oil-weighted royalty companies enjoy. You are locked into the natural gas market, which is why the performance of gas-focused technology like horizontal drilling in the Mancos is so important.

The basin-wide production decline reflects this rigidity; San Juan gas production has fallen from a peak of 4.5 Bcf/d in the early 2000s to an estimated 1.7 Bcf/d in 2025.

Technological success is the only lever for growth here.

• Horizontal wells access more reserves per pad.
• Mancos Shale development is the key focus area.
• Drilling technology must overcome aging conventional wells.
• The Trust has no ability to shift to oil production.

Finance: draft 13-week cash view by Friday.

San Juan Basin Royalty Trust (SJT) - PESTLE Analysis: Legal factors

You're looking at a structure that is legally rigid, which is a major factor in how SJT navigates the current commodity price environment. The legal framework essentially locks the asset base in place, meaning no growth through acquisition is possible.

Asset Base Restriction and Governing Documents

The Trust's governing documents, specifically the Amended and Restated Royalty Trust Indenture (as amended on February 15, 2024), are quite restrictive. A key legal constraint is that the Trust prohibits acquiring new properties, effectively fixing the asset base to the existing San Juan Basin acreage. This means the only way for the Trust to generate more revenue is through the production performance of the current assets, which are operated entirely by Hilcorp San Juan L.P. The Trustee, Argent Trust Company, is authorized to retain a cash reserve for liabilities, but the primary legal hurdle right now is clearing the massive deficit before any cash flows back to you, the unitholder.

Here are the key legal conditions that must be met before distributions resume:

• Repay the balance of Excess Production Costs (EPC).
• Replenish the cash reserve to $2,000,000.
• Repay the principal and interest on the Line of Credit.

Cash Reserve Mandate and Distribution Suspension

The Trustee has a clear, legally defined path for resuming monthly distributions, and it starts with building up the cash cushion. If onboarding takes 14+ days, churn risk rises, but here, if the reserve isn't topped up, distributions stay suspended. As of the latest filings, the Trust is far from this target. For instance, as of October 2025, the cash reserves stood at a mere $27,243 after using some funds to cover interest on the Line of Credit. This is a long way from the required $2.0 million target.

The current situation is stark, showing zero distributable income for many months in 2025, such as the $0.00 distribution declared for October 2025. The Trust must first clear the EPC overhang, which was approximately $11,630,625 gross as of the August 2025 production month reporting.

Going Concern Qualification

Legally, the preparation of financial statements must assume a going concern, but the reality forces a major caveat. As of September 30, 2025, management explicitly disclosed substantial doubt about the San Juan Basin Royalty Trust's ability to continue as a going concern. This is a direct legal consequence of the cumulative EPC balance, which was over $10.1 million net to the Trust at that time.

Here's a snapshot of the financial pressure points that trigger this legal disclosure:

Metric	Value as of Sep 30, 2025 (Approximate)	Source of Doubt
Cumulative EPC (Net)	$10,195,300	EPC must be recovered before Net Proceeds yield Royalty Income
Cash Reserves	$29,160	Far below the required $2.0 million replenishment target
Line of Credit Outstanding	$274,135	Must be repaid before distributions resume

What this estimate hides is that the going concern warning is based on the current inability to cover liabilities and reserves, not a prediction of future operational failure by Hilcorp. Still, it's a red flag for any income-focused investor.

Operational Control and Fiduciary Duty

You definitely need to understand that SJT is a passive entity. The Trust has no operational control whatsoever; it is entirely dependent on Hilcorp's management decisions regarding drilling, production, and cost management. The Trustee's role is primarily oversight and fiduciary duty, not day-to-day management of the gas wells.

The Trustee's legal recourse involves continuous engagement and auditing. Argent Trust Company routinely engages with Hilcorp concerning accounting, reporting, sales revenues, production costs, and capital expenditures. This dependency means that the pace at which the massive EPC balance is paid down is entirely dictated by Hilcorp's operational spending and the resulting net proceeds. If Hilcorp decides to ramp up capital expenditures again, the legal path back to distributions for unitholders gets longer, defintely.

Finance: draft 13-week cash view by Friday

San Juan Basin Royalty Trust (SJT) - PESTLE Analysis: Environmental factors

You're managing a royalty interest in the San Juan Basin, and honestly, the environmental landscape is getting tighter, which directly affects the long-term viability of those aging gas wells your Trust relies on.

The primary concern is the basin's natural decline coupled with increasingly strict state oversight, especially around water and emissions. This isn't just about public perception; it's about compliance costs and operational continuity for the operators who pay you royalties.

New Mexico Regulations for Produced Water Reuse and Disposal

New Mexico took a hard line on produced water (the toxic wastewater from drilling) in 2025. The Water Quality Control Commission voted in May 2025 to completely ban any discharge of treated produced water to ground or surface waters. This is a big deal because New Mexico generates roughly 2 billion barrels of this wastewater annually.

While the ban is in effect, the state is planning Phase 2 rulemaking in 2026 to explore safe reuse pathways. For now, operators must rely on injection wells or closed-loop systems, which adds complexity and cost. To be fair, the state is trying to protect its scarce water, but this regulatory uncertainty impacts future drilling decisions in the basin.

The risk of spills remains a factor; state records showed 938 incidents of produced water spills in 2023.

Declining Production and Aging Well Infrastructure

The Trust's main asset is tied to a basin that has been shrinking since its peak in 2010. Natural gas production has been steadily falling due to competition and the maturity of the coalbed methane (CBM) wells.

Here's a quick look at the trend for the gas that matters to your cash flow:

Metric	2010 (Peak/Baseline)	2024 Estimate	2025 Forecast
San Juan Raw Gas Production (Bcf/d)	3.372	1.701 (Total)	1.644 (Old Wells Only)
Total Annual Gas Production (Tscf)	0.86	~0.47 (in 2024)	N/A
Annual Water Production (MMBW)	~49 (Peak in 2011)	~20 (in 2024)	N/A

The older infrastructure inherited by the current smaller operators often means higher potential for leaks and emissions.

Methane Emissions and Compliance Costs

Methane is a potent greenhouse gas, and New Mexico has aggressive rules to control it. Operators are required to capture no less than 98% of their natural gas waste by the end of 2026.

The state's rules appear effective, as 2024-2025 satellite data showed New Mexico's methane intensity in the Permian at 1.2% versus Texas's 3.1% in the Delaware sub-basin. This captured gas is not just an environmental win; it generated an estimated $125 million in additional natural gas production value and $27 million in tax revenue for the state in the measurement period.

For operators, compliance means capital expenditure on new equipment and leak detection. Furthermore, the regulatory expansion under Senate Bill 4 could mean the Environment Department needs 10 more personnel and up to $1.7 million in new funding to enforce these rules.

Water Management and Drilling Viability

Water is the lifeblood of any drilling operation, and in arid New Mexico, it's a constant constraint. Water management-sourcing, transport, treatment, and disposal-is now a central economic factor.

For the San Juan Basin specifically, the petroleum industry holds about 6.3% of the groundwater rights, totaling around 6,674 acre-ft/year. New horizontal wells are water-intensive, averaging 3.13 acre-feet (af) per well.

The cost of moving water is significant, with transport accounting for 43% of total water-related expenses for operators. If operators cannot secure cost-effective water or disposal for produced water due to the new discharge bans, drilling viability for new infill wells in the basin definitely suffers.

• Transport costs drive the push for water reuse.
• U.S. midstream water market projected at $156 billion (2025-2030).
• Reuse is seen as key to reducing freshwater demand.
• New drilling is focused on the Mancos Shale.

Finance: draft 13-week cash view by Friday.