-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 PaLqzyx0WoNNBx67ASZrbjp/Y66adEd+40sDRHBvkAXgV13xmwcFTzl4S3pJNT2H
 yb6v/8HXSS+KHJjcZ0IOVg==

<SEC-DOCUMENT>0000950134-04-016729.txt : 20041108
<SEC-HEADER>0000950134-04-016729.hdr.sgml : 20041108
<ACCEPTANCE-DATETIME>20041108161140
ACCESSION NUMBER:		0000950134-04-016729
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20040930
FILED AS OF DATE:		20041108
DATE AS OF CHANGE:		20041108

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SAN JUAN BASIN ROYALTY TRUST
		CENTRAL INDEX KEY:			0000319655
		STANDARD INDUSTRIAL CLASSIFICATION:	OIL ROYALTY TRADERS [6792]
		IRS NUMBER:				756279898
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08032
		FILM NUMBER:		041125933

	BUSINESS ADDRESS:	
		STREET 1:		TEXASBANK, TRUST DEPARTMENT
		STREET 2:		2525 RIDGMAR BOULEVARD SUITE 100
		CITY:			FORT WORTH
		STATE:			TX
		ZIP:			76116
		BUSINESS PHONE:		8668094553

	MAIL ADDRESS:	
		STREET 1:		TEXASBANK, TRUST DEPARTMENT
		STREET 2:		2525 RIDGMAR BOULEVARD SUITE 100
		CITY:			FORT WORTH
		STATE:			TX
		ZIP:			76116
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d19834e10vq.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vq</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 14pt">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION

<DIV align="center" style="font-size: 12pt">Washington, D.C. 20549
</DIV>

<P align="center" style="font-size: 18pt">Form&nbsp;10-Q


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 12pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#120;</FONT>&nbsp;</TD>
    <TD>Quarterly Report Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">For the Quarterly Period Ended September&nbsp;30, 2004<BR>
or



<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 12pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Transition Report Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">For the transition period from <U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U>to <U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U>



<P align="center" style="font-size: 10pt">Commission File No.&nbsp;1-8032


<P align="center" style="font-size: 24pt">SAN JUAN BASIN ROYALTY TRUST

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in the</DIV>


<DIV align="center" style="font-size: 10pt">Amended and Restated San Juan Basin Royalty Trust Indenture)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Texas
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">75-6279898</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">of incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">TexasBank, Trust Department<BR>
2525 Ridgmar Boulevard, Suite&nbsp;100<BR>
Fort Worth, Texas 76116<BR>
(Address of principal executive offices)<BR>
(Zip Code)



<P align="center" style="font-size: 10pt">Telephone Number: (866)&nbsp;809-4553


<DIV align="center" style="font-size: 10pt">(Registrant&#146;s telephone number, including area code)</DIV>


<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports
required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to file such reports), and (2)&nbsp;has been subject to such
filing requirements for the past 90&nbsp;days.&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="Wingdings">&#120;</FONT>&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#111;</FONT>


<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule&nbsp;12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="Wingdings">&#120;</FONT>&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#111;</FONT>


<P align="left" style="font-size: 10pt">Number of Units of beneficial interest outstanding at November&nbsp;8, 2004:
46,608,796



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000"> PART I FINANCIAL INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">Item&nbsp;1. Financial Statements</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#002">CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#003">CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#004">CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#005">NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#006">Item&nbsp;2. Trustee&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#007">Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#008">Item&nbsp;4. Controls and Procedures</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009"> PART II OTHER INFORMATION</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#010">Item&nbsp;1. Legal Proceedings</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#011">Item&nbsp;6. Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012"> SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013"> INDEX TO EXHIBITS</A></TD></TR>
<TR><TD colspan="9"><A HREF="d19834exv31.htm">Certification Required by Rule 13a-14(a)</A></TD></TR>
<TR><TD colspan="9"><A HREF="d19834exv32.htm">Certification Required by Rule 13a-14(b)</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>







<P align="center" style="font-size: 10pt"><B>SAN JUAN BASIN ROYALTY TRUST</B>


<!-- link1 " PART I FINANCIAL INFORMATION" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center" style="font-size: 10pt"><B>PART I<BR>
FINANCIAL INFORMATION</B>


<!-- link2 "Item&nbsp;1. Financial Statements" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;1. Financial Statements.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The condensed financial statements included herein have been prepared
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. In accordance with Securities and Exchange Commission
Staff Accounting Bulletin No.&nbsp;47, released September&nbsp;16, 1982, the financial
statements of the San Juan Basin Royalty Trust (the &#147;Trust&#148;) continue to be
prepared in a manner that differs from accounting principles generally accepted
in the United States of America (&#147;GAAP&#148;); this form of presentation is
customary to other royalty trusts. Certain information and footnote
disclosures normally included in annual financial statements have been
condensed or omitted pursuant to Rule&nbsp;10-01 of Regulation&nbsp;S-X promulgated under
the Securities Exchange Act of 1934, although TexasBank, the Trustee of the
Trust, believes that the disclosures are adequate to make the information
presented not misleading. These condensed financial statements should be read
in conjunction with the financial statements and the notes thereto included in
the Trust&#146;s Annual Report on Form 10-K for the year ended December&nbsp;31, 2003.
In the opinion of the Trustee, all adjustments, consisting only of normal
recurring adjustments, have been included that are necessary to present fairly
the assets, liabilities and trust corpus of the San Juan Basin Royalty Trust at
September&nbsp;30, 2004, and the distributable income and changes in trust corpus
for the three-month periods and nine-month periods ended September&nbsp;30, 2004 and
2003. The distributable income for such interim periods is not necessarily
indicative of the distributable income for the full year.


<P align="center" style="font-size: 10pt">2
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>SAN JUAN BASIN ROYALTY TRUST</B>


<!-- link3 "CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="left" style="font-size: 10pt"><B>CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>September 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3"><B>(Unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash and short-term investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,691,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,082,284</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net overriding royalty interest in producing
oil and gas properties (net of accumulated
amortization of $105,786,838 and $103,452,708
at September&nbsp;30, 2004 and December&nbsp;31, 2003, respectively)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,488,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,822,820</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">38,180,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,905,104</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>LIABILITIES AND TRUST CORPUS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distribution payable to Unit Holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,576,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,967,426</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,858</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Trust corpus - 46,608,796 Units of beneficial
interest authorized and outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,488,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,822,820</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">38,180,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,905,104</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<!-- link3 "CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="left" style="font-size: 10pt"><B>CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Nine Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Royalty income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">34,673,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,332,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">81,379,357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70,294,774</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,613</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,692,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,341,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81,418,349</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,327,387</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">General and
administrative
expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">290,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">520,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,333,044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,389,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distributable income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">34,401,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23,821,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">80,085,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">68,938,314</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distributable income
per Unit (46,608,796
Units)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">.738093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">.511093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.718245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.479085</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">The accompanying notes to condensed financial statements are an integral part of these statements.









<P align="center" style="font-size: 10pt">3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="left" style="font-size: 10pt"><B>SAN JUAN BASIN ROYALTY TRUST</B>


<!-- link3 "CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="left" style="font-size: 10pt"><B>CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Nine Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Trust corpus, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,338,910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">31,722,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">29,822,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">33,697,906</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Amortization of net overriding
royalty interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(850,220</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(975,950</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,334,130</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,951,496</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distributable income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,401,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,821,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,085,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,938,314</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distributions declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(34,401,621</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(23,821,432</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(80,085,305</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(68,938,314</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total corpus, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,488,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,746,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,488,690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,746,410</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">The accompanying notes to condensed financial statements are an integral part of these statements.



<P align="center" style="font-size: 10pt">4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="left" style="font-size: 10pt"><B>SAN JUAN BASIN ROYALTY TRUST</B>


<!-- link3 "NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="left" style="font-size: 10pt"><B>NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)</B>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>BASIS OF ACCOUNTING</B></TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The San Juan Basin Royalty Trust (the &#147;Trust&#148;) was established as of
November&nbsp;1, 1980. The financial statements of the Trust are prepared on
the following basis:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalty income recorded for a month is the amount computed and
paid by the working interest owner, Burlington Resources Oil &#038; Gas
Company LP (&#147;BROG&#148;), to the Trustee for the Trust. Royalty income
consists of the amounts received by the owner of the interest
burdened by the Trust&#146;s 75% net overriding royalty interest (the
&#147;Royalty&#148;) from the sale of production less accrued production costs,
development and drilling costs, applicable taxes, operating charges,
and other costs and deductions, multiplied by 75%. Any adjustments
to the Royalty income received from BROG are recorded by the Trust
when received and impact the distribution to Unit Holders for that
month.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Trust expenses recorded are based on liabilities paid and cash
reserves established from Royalty income for liabilities and
contingencies.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Distributions to Unit Holders are recorded when declared by the
Trustee.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The conveyance which transferred the Royalty to the Trust
provides that any excess of production costs over gross proceeds must
be recovered from future net profits before Royalty income is again
paid to the Trust.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The financial statements of the Trust differ from financial statements
prepared in accordance with United States generally accepted accounting
principles (&#147;GAAP&#148;) because revenues are not accrued in the month of
production; certain cash reserves may be established for contingencies
that would not be accrued in financial statements prepared in accordance
with GAAP; expenses are recorded when paid instead of when incurred; and
amortization of the Royalty calculated on a unit-of-production basis is
charged directly to trust corpus instead of as an expense. The basis of
accounting used by the Trust is widely used by royalty trusts for
financial reporting purposes.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FEDERAL INCOME TAXES</B></TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">For federal income tax purposes, the Trust constitutes a fixed investment
trust that is taxed as a grantor trust. A grantor trust is not subject to
tax at the trust level. The Unit Holders are considered to own the
Trust&#146;s income and principal as though no trust were in existence. The
income of the Trust is deemed to have been received or accrued by each
Unit Holder at the time such income is received or accrued by the Trust
rather than when distributed by the Trust.


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Royalty constitutes an &#147;economic interest&#148; in oil and gas properties
for federal income tax purposes. Unit Holders must report their share of
the revenues of the Trust as ordinary income from oil and gas royalties
and are entitled to claim depletion with respect to such income. The
Royalty is treated as a single property for depletion purposes. The Trust
has on file technical advice memoranda confirming such tax treatment.




<P align="center" style="font-size: 10pt">5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Sales of production from coal seam wells drilled prior to January&nbsp;1, 1993,
qualified for federal income tax credits through 2002. Although both
houses of Congress are presently considering energy legislation, including
provisions to extend or reinstate the Section&nbsp;29 credit in various ways,
whether such provisions will be enacted into law, and if so, the effect
thereof on the Trust and the Unit Holders is at present unknown. Even
though the Section&nbsp;29 credit does not apply to qualified fuel sold in
2003 or later, a Section&nbsp;29 credit (at the rate applicable in 2002) may
apply to proceeds received in 2003 or later for qualified fuel sold in
2002 and earlier years for Unit Holders that utilize the cash method of
tax accounting. The Internal Revenue Service has issued Rev. Proc.
2004-27 to the effect that cash method taxpayers may claim the Section&nbsp;29
credit in a later year for sales of qualified fuel in 2002 and earlier
years where the proceeds from such sales are received in the later year.


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">To benefit from the credit in 2004, each cash basis Unit Holder must
determine from the tax information the Unit Holder received from the
Trust, its pro rata share of qualifying production of the Trust sold
before January&nbsp;1, 2003, based upon the number of Units owned during each
month of the year, and the amount of available credit per MMbtu for the
year, and then apply the tax credit against the Unit Holder&#146;s own income
tax liability, but such credit could not reduce the Unit Holder&#146;s regular
tax liability (after the foreign tax credit and certain other
nonrefundable credits) below its tentative minimum tax. Section&nbsp;29 also
provides that any amount of Section&nbsp;29 credit disallowed for the tax year
solely because of this limitation will increase a taxpayer&#146;s credit for
prior year minimum tax liability, which may be carried forward
indefinitely as a credit against the taxpayer&#146;s regular tax liability,
subject, however, to the limitations described in the preceding sentence.
There is no provision for the carryback or carryforward of the Section&nbsp;29
credit in any other circumstance.


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">BROG has historically provided to the Trust summary Section&nbsp;29 tax credit
information related to Trust properties. In 1999, the U.S. Court of
Appeals for the 10th Circuit upheld the position of the Internal Revenue
Service and the Tax Court that nonconventional fuel such as coal seam gas
does not qualify for the Section&nbsp;29 credit unless the producer has
received an appropriate well category determination from the Federal
Energy Regulatory Commission. Substantially all of the wells burdened by
the Royalty have received the appropriate well category certification.
BROG has informed the Trustee that it will continue to seek certification
of any qualified but not certified wells burdened by the Royalty.


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The classification of the Trust&#146;s income for purposes of the passive loss
rules may be important to a Unit Holder. As a result of the Tax Reform
Act of 1986, royalty income such as that derived through the Trust will
generally be treated as portfolio income and will not reduce passive
losses.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>CONTINGENCIES</B></TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">See Part&nbsp;II, Item&nbsp;1 (Legal Proceedings) concerning the status of
litigation matters.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SETTLEMENT OF CLAIMS RELATING TO GAS IMBALANCE</B></TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In June&nbsp;2000, the Trust and BROG entered into a partial settlement of
claims relating to a gas imbalance with respect to production from mineral
properties currently operated by BROG. Under the terms of the partial
settlement BROG paid the Trust $3,490,000 to settle the imbalance insofar
as it relates to some of the wells located on the subject properties. The
remainder of the imbalance has been addressed by a $243,968 increase in
revenue allocated by BROG to the Trust in July&nbsp;2004, which amount is
included in the $1,835,500 referenced in Note 6 below.




<P align="center" style="font-size: 10pt">6
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>MMS SETTLEMENT</B></TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">As part of a settlement between BROG and the Mineral Management Service of
the United States Department of the Interior relating to the property from
which the Trust&#146;s Royalty was carved, $901,776 (the Trust&#146;s 75% interest
of the total settlement) was deducted by BROG in calculating the Trust&#146;s
April&nbsp;2003 Royalty payment. The Trust is in communication with BROG as to
the appropriateness of this allocation.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SETTLEMENT OF JOINT INTEREST AUDIT ISSUES</B></TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 2%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In July&nbsp;2004, an aggregate of $1,835,500 was included by BROG in
calculating the Trust&#146;s July&nbsp;2004 Royalty payment. This represents the
Trust&#146;s 75% interest in the settlement of certain joint interest audit
issues, including claims related to natural gas liquids, gas imbalances
and interest on other settled claims. Also in July&nbsp;2004, BROG adjusted
the capital expenditures accrued for the properties to which the Royalty
relates by approximately $1&nbsp;million, resulting in a corresponding increase
in the Royalty income received by the Trust in July&nbsp;2004.



<P align="center" style="font-size: 10pt">7
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link2 "Item&nbsp;2. Trustee&#146;s Discussion and Analysis of Financial Condition and Results of Operations" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;2. Trustee&#146;s Discussion and Analysis of Financial Condition and Results of Operations.</B>



<P align="left" style="font-size: 10pt"><B>Forward-Looking Information</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain information included in this Quarterly Report on Form 10-Q
contains, and other materials filed or to be filed by the Trust with the
Securities and Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by the Trust) may
contain or include, forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934 and Section&nbsp;27A of the Securities
Act of 1933. Such forward-looking statements may be or may concern, among
other things, capital expenditures, drilling activity, development activities,
production efforts and volumes, hydrocarbon prices and the results thereof, and
regulatory matters. Such forward-looking statements generally are accompanied
by words such as &#147;may,&#148; &#147;will,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;predict,&#148; &#147;project,&#148;
&#147;anticipate,&#148; &#147;goal,&#148; &#147;should,&#148; &#147;assume,&#148; &#147;believe,&#148; &#147;plan,&#148; &#147;intend,&#148; or other
words that convey the uncertainty of future events or outcomes. Such
statements reflect BROG&#146;s current view with respect to future events; are based
on an assessment of, and are subject to, a variety of factors deemed relevant
by the Trustee and BROG and involve risks and uncertainties. Should one or
more of these risks or uncertainties occur, actual results may vary materially
and adversely from those anticipated.


<P align="left" style="font-size: 10pt"><B>Business Overview</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust is an express trust created under the laws of the state of Texas
by the San Juan Basin Royalty Trust Indenture (the &#147;Original Indenture&#148;)
entered into on November&nbsp;3, 1980, between Southland Royalty Company (&#147;Southland
Royalty&#148;) and The Fort Worth National Bank. Effective as of September&nbsp;30,
2002, the Original Indenture was amended and restated (the Original Indenture,
as amended and restated, the &#147;Indenture&#148;). The Trustee of the Trust is
TexasBank.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;23, 1980, the stockholders of Southland Royalty approved and
authorized that company&#146;s conveyance of a 75% net overriding royalty interest
(equivalent to a net profits interest) to the Trust for the benefit of the
stockholders of Southland Royalty of record at the close of business on the
date of the conveyance (the &#147;Royalty&#148;) carved out of that company&#146;s oil and gas
leasehold and royalty interests in properties located in the San Juan Basin of
northwestern New Mexico (the &#147;Underlying Properties&#148;). Pursuant to the Net
Overriding Royalty Conveyance (the &#147;Conveyance&#148;) the Royalty was transferred to
the Trust on November&nbsp;3, 1980, effective as to production from and after
November&nbsp;1, 1980 at 7:00 a.m.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Royalty constitutes the principal asset of the Trust, and the
beneficial interests in the Royalty are divided into that number of units of
beneficial interest (the &#147;Units&#148;) of the Trust equal to the number of shares of
the common stock of Southland Royalty outstanding as of the close of business
on November&nbsp;3, 1980. Holders of Units are referred to herein as &#147;Unit
Holders.&#148; Subsequent to the conveyance of the Royalty, through a series of
assignments and mergers, Southland Royalty&#146;s successor became BROG.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The function of the Trustee is to collect the income attributable to the
Royalty, to pay all expenses and charges of the Trust, and then distribute the
remaining available income to the Unit Holders. The Trust is not empowered to
carry on any business activity and has no employees, all administrative
functions being performed by the Trustee.


<P align="left" style="font-size: 10pt"><B>Three Months Ended September&nbsp;30, 2004 and 2003</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust received Royalty income of $34,673,819 and interest income of
$18,478 during the third quarter of 2004. There was no change in cash
reserves. After deducting administrative expenses of $290,676, distributable
income for the quarter was $34,401,621 ($.738093 per Unit). In the third
quarter of 2003, royalty income was $24,332,317, interest income was $9,359,
there was no change in cash reserves,


<P align="center" style="font-size: 10pt">8
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">administrative expenses were $520,244 and distributable income was
$23,821,432 ($.511093 per Unit). Based on 46,608,796 Units outstanding, the
per Unit distributions during the third quarter of 2004 were as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">July</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">.272427</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">August</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">.238738</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">September</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">.226928</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Quarter Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">.738093</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Royalty income distributed in the third quarter of 2004 was higher
than that distributed in the third quarter of 2003 primarily due to an increase
in the average gas price from $3.90 per Mcf for the third quarter of 2003 to
$5.25 per Mcf for the third quarter of 2004. In addition, in July&nbsp;2004, an
aggregate of $1,835,500 was included by BROG in calculating the Trust&#146;s July
2004 Royalty payment. This represented the Trust&#146;s 75% interest in the
settlement of certain joint interest audit issues, including claims related to
natural gas liquids, gas imbalances and interest on other settled claims.
Also, in July&nbsp;2004, BROG adjusted the capital expenditures accrued for the
properties to which the Royalty relates by approximately $1&nbsp;million, resulting
in a corresponding increase in the Royalty income received by the Trust in July
2004. Interest earnings for the quarter ended September&nbsp;30, 2004, as compared
to the quarter ended September&nbsp;30, 2003, were higher, primarily due to an
increase in funds available for investment and slightly higher interest rates.
Administrative expenses were lower primarily as a result of differences in
timing in the receipt and payment of these expenses and because administrative
expenses in the third quarter of 2003 included expenses incurred in
negotiations involving BROG and the Trust undertaken to resolve certain joint
interest auditing issues.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BROG has informed the Trustee that the New Mexico Oil and Gas Proceeds
Withholding Tax Act (the &#147;Withholding Tax Act&#148;) requires remitters who pay
certain oil and gas proceeds from production on New Mexico properties on or
after October&nbsp;1, 2003, to withhold income taxes from such proceeds in the case
of certain nonresident recipients. The Trustee, on advice of counsel, has
observed that &#147;net profits interests,&#148; such as the Royalty, and other types of
interests, the extent of which cannot be determined with respect to a specific
share of the oil and gas production, are excluded from the withholding
requirements of the Withholding Tax Act. Unit Holders are reminded to consult
with their tax advisors regarding the applicability of New Mexico income tax to
distributions received from the Trust by a Unit Holder.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The capital costs attributable to the Underlying Properties for the third
quarter of 2004 were reported by BROG as approximately $3.5&nbsp;million. BROG&#146;s
capital expenditure budget for the Underlying Properties for 2004 is estimated
at $18.5&nbsp;million of which approximately $7.1&nbsp;million has been spent as of
September&nbsp;30, 2004; however, BROG reports that based on its actual capital
requirements, its mix of projects and changes in the price of natural gas, the
actual capital expenditures for 2004 could range from $15&nbsp;million to $25
million. Capital expenditures were approximately $4.3&nbsp;million for the third
quarter of 2003. In 2003, approximately $20.6&nbsp;million in capital expenditures
were deducted in calculating Royalty income. In February&nbsp;2004, BROG informed
the Trustee that for 2004 it anticipates 441 projects, including the drilling
of 103 new wells to be operated by BROG and 29 wells to be operated by third
parties. Of the new BROG operated wells, 30 are projected to be conventional
wells completed in the Pictured Cliffs, Mesaverde and/or Dakota formations, and
the remaining 73 are projected as coal seam wells completed in the Fruitland
Coal formation. A total of 22 of the wells operated by third parties are
projected to be conventional wells, and the remaining seven are projected to be
coal seam wells. BROG projects approximately $11.7&nbsp;million to be spent on the
new wells, and $6.8&nbsp;million to be expended in working over existing wells and
in the maintenance and improvement of production facilities. BROG has
indicated that, principally as a result of the New Mexico Oil Conservation
Division&#146;s approval of reduced, 160-acre spacing in the Fruitland Coal
formation, BROG&#146;s budget for 2004 reflects a continued focus on that
formation.


<P align="center" style="font-size: 10pt">9
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BROG indicates its budget for 2004 reflects continued, significant
development of conventional formations, including infill drilling to the
Mesaverde and Dakota formations, development of the Fruitland Coal formation
and multiple formation completions. A majority of the new wells for 2004 are
projected to be drilled on Underlying Properties in which the fractional
working interest included in the Underlying Properties is relatively low, but
many of the recompletions and restimulations are scheduled on properties in
which such working interest is relatively high.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BROG has informed the Trust that lease operating expenses and property
taxes attributable to the Underlying Properties were $4,644,449 and $195,518
respectively, for the third quarter of 2004, as compared to $3,917,464 and
$135,000 respectively, for the third quarter of 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BROG has reported to the Trustee that during the third quarter of 2004,
three gross (0.005 net) conventional wells, seven gross (5.59 net)
recompletions, one gross (.88 net) restimulation, eight gross (2.72 net) coal
seam wells, one gross (.87 net) coal seam recompletion, and one gross (.007
net) miscellaneous coal seam project were completed on the Underlying
Properties.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thirty-four gross (5.75 net) conventional wells, seven gross (3.12 net)
recompletions, three gross (2.24 net) restimulations, five gross (1.73 net)
payadds, 77 gross (7.68 net) coal seam wells, five gross (2.74 net) coal seam
recompletions, and one gross (.06 net) miscellaneous coal seam project were in
progress at September&nbsp;30, 2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were 16 gross (2.94 net) coal seam wells, two gross (.92 net)
recavitations, 11 gross (4.71 net) conventional wells, 11 gross (1.49 net)
payadds, five gross (1.45 net) recompletions, and 11 gross (8.8 net)
restimulations completed on the Underlying Properties as of September&nbsp;30, 2003.
Thirty-six gross (15.98 net) coal seam wells, four gross (.12 net)
miscellaneous coal seam capital projects, one gross (.002 net) recavitation, 11
gross (1.16 net) coal seam recompletions, 47 gross (13.2 net) conventional
wells, 12 gross (3.93 net) payadds, 17 gross (4.19 net) recompletions, and 10
gross (2.77 net) restimulations were in progress at September&nbsp;30, 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Gross&#148; acres or wells, for purposes of this discussion, means the entire
ownership interest of all parties in such properties, and BROG&#146;s interest
therein is referred to as the &#147;net&#148; acres or wells. A payadd is the completion
of an additional productive interval in an existing completed zone in a well.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalty income for the quarter ended September&nbsp;30, 2004 is associated with
actual gas and oil production during May&nbsp;2004 through July&nbsp;2004 from the
Underlying Properties. Gas and oil sales from the Underlying Properties for
the three months ended September&nbsp;30, 2004 and 2003 were as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gas:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total sales (Mcf)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,859,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,432,834</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Mcf per day</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124,270</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Average price (per Mcf)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.90</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Oil:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total sales (Bbls)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,091</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,023</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Bbls per day</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">185</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Average price (per Bbl)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">35.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24.74</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">10
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">Gas and oil sales attributable to the Royalty for the quarters ended September
30, 2004 and 2003 were as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="42%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gas sales (Mcf)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,859,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,819,487</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Oil sales
(Bbls)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,161</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales volumes attributable to the Royalty are determined by dividing the
net profits received by the Trust and attributable to oil and gas,
respectively, by the prices received for sales volumes from the Underlying
Properties, taking into consideration production taxes attributable to the
Underlying Properties. Since the oil and gas sales attributable to the Royalty
are based on an allocation formula that is dependent on such factors as price
and cost, including capital expenditures, the aggregate production volumes from
the Underlying Properties may not provide a meaningful comparison to volumes
attributable to the Royalty.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the third quarter of 2004, average gas prices were $1.35 higher
than the average prices reported during the third quarter of 2003. The average
price per barrel of oil during the third quarter of 2004 was $10.79 per barrel
higher than that received for the third quarter of 2003 due to increases in oil
prices in world markets generally, including the posted prices applicable to
oil sales attributable to the Royalty.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BROG has entered into two contracts for the sale of all volumes of gas
produced from the Underlying Properties. These contracts provide for (i)&nbsp;the
sale of such gas to Duke Energy and Marketing, L.L.C. and PNM Gas Services,
respectively, (ii)&nbsp;the delivery of such gas at various delivery points through
March&nbsp;31, 2005, and from year-to-year thereafter until terminated by either
party on twelve months notice, and (iii)&nbsp;for the sale of such gas at prices
which fluctuate in accordance with published indices for gas sold in the San
Juan Basin of New Mexico. Effective January&nbsp;1, 2004, the rights and
obligations of Duke Energy and Marketing L.L.C. were assumed by ConocoPhillips
Company (&#147;ConocoPhillips&#148;) pursuant to an Assignment and Novation Agreement.
By correspondence dated March&nbsp;25, 2004, BROG notified ConocoPhillips of BROG&#146;s
election to terminate such contract as of March&nbsp;31, 2005. BROG has prepared a
form of request for proposal and has circulated it to a number of potential
purchasers, including ConocoPhillips, inviting them to bid for the purchase of
the gas currently sold under the contract expiring March&nbsp;31, 2005. Unit
Holders are referred to Note 6 of the Notes to Financial Statements in the
Trust&#146;s 2003 Annual Report for further information concerning the marketing of
gas produced from the Underlying Properties.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Confidentiality agreements with purchasers of gas produced from the
Underlying Properties prohibit public disclosure of certain terms and
conditions of gas sales contracts with those entities, including specific
pricing terms and gas receipt points. Such disclosure could compromise the
ability to compete effectively in the marketplace for the sale of gas produced
from the Underlying Properties.


<P align="left" style="font-size: 10pt"><B>Nine Months Ended September&nbsp;30, 2004 and 2003</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the nine months ended September&nbsp;30, 2004, the Trust received Royalty
income of $81,379,357 and interest income of $38,992. There was no change in
cash reserves. After deducting administrative expenses of $1,333,044,
distributable income was $80,085,305 ($1.718245 per unit) for the nine months
ended September&nbsp;30, 2004. For the nine months ended September&nbsp;30, 2003, the
Trust received Royalty income of $70,294,774 and interest income of $32,613.
There was no change in cash reserves. After deducting administrative expenses
of $1,389,073, distributable income was $68,938,314 ($1.479085 per unit) for
the nine months ended September&nbsp;30, 2003.


<P align="center" style="font-size: 10pt">11
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase in distributable income from 2003 to 2004 resulted primarily
from higher gas prices during the first nine months of 2004. Interest earnings
for the nine months ended September&nbsp;30, 2004, as compared to the nine months
ended September&nbsp;30, 2003 were higher primarily due to greater funds being
available for investment. General and administrative expenses were lower for
the nine months ended September&nbsp;30, 2004, as compared to the same period in
2003 primarily due to an initiative undertaken in 2003 to resolve certain
outstanding joint interest audit issues with BROG and to differences in timing
of the receipt and payment of these expenses.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures incurred by BROG, attributable to the Underlying
Properties, for the first nine months of 2004 amounted to approximately $17.5
million. Capital expenditures were approximately $13.7&nbsp;million for the first
nine months of 2003. Lease operating expenses and property taxes attributable
to the Underlying Properties totaled $13,258,390 and $445,018, respectively,
for the first nine months of 2004 as compared to $11,741,872 and $406,250,
respectively, for the first nine months of 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BROG has reported to the Trustee that during the nine months ended
September&nbsp;30, 2004, 21 gross (6.39 net) conventional wells, three gross (0.007
net) payadds, eight gross (6.03 net) recompletions, nine gross (5.95 net)
restimulations, 34 gross (5.20 net) coal seam wells, two gross (1.69 net) coal
seam recompletions, and two gross (0.05 net) miscellaneous coal seam capital
projects were completed on the Underlying Properties.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the nine months ended September&nbsp;30, 2003, 25 gross (13.81 net)
conventional wells and three gross (.94 net) miscellaneous capital projects
were completed on the Underlying Properties. Forty-nine gross (3.22 net)
payadds and 29 gross (21.55 net) restimulations were completed during the first
nine months of 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalty income for the nine months ended September&nbsp;30, 2004 is associated
with actual gas and oil production during November&nbsp;2003 through July&nbsp;2004 from
the Underlying Properties. Gas and oil sales from the Underlying Properties
for the nine months ended September&nbsp;30, 2004 and 2003 were as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Nine Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gas:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total sales (Mcf)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,720,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,524,990</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Mcf per day</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119,416</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122,802</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Average price (per Mcf)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.95</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Oil:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total Sales (Bbls)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,511</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Bbls per day</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">218</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">211</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Average price (per Bbl)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">32.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26.00</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gas and oil sales attributable to the Royalty for the nine months ended
September&nbsp;30, 2004 and 2003 were as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="42%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Nine Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gas sales (Mcf)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,758,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,469,033</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Oil sales (Bbls)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,591</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">12
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the first nine months of 2004, gas and oil prices were higher than
during the first nine months of 2003. Since the oil and gas sales attributable
to the Royalty are based on an allocation formula that is dependant on such
factors as price and cost, including capital expenditures, the aggregate sales
amounts from the Underlying Properties may not provide a meaningful comparison
to sales attributable to the Royalty.


<P align="left" style="font-size: 10pt"><B>Calculation of Royalty Income</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalty income received by the Trust for the three months and nine months
ended September&nbsp;30, 2004 and 2003, respectively, was computed as shown in the
following table:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Nine Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>September 30,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2004</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gross proceeds of sales from the
Underlying Properties:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gas proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">56,977,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">44,569,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">150,416,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">132,316,877</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Oil proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">749,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">421,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,918,288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,495,298</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,447,333</TD>
    <TD nowrap>(1)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,447,333</TD>
    <TD nowrap>(1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,202,368</TD>
    <TD nowrap>)(2)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,174,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,990,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154,782,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">132,609,807</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less production costs:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Severance tax &#150; gas</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,571,441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,154,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,838,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,833,373</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Severance tax &#150; oil</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">130,913</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Lease operating expense and property tax</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,839,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,052,464</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,703,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,148,122</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3,455,618</TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,303,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">17,495,100</TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,729,184</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,942,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,547,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,276,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,883,442</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less excess production costs and
interest from prior year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net profits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,231,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32,443,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,505,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,726,365</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net overriding royalty interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">75</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">75</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">75</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">75</TD>
    <TD nowrap>%</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Royalty income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">34,673,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24,332,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">81,379,357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70,294,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">In July&nbsp;2004, an aggregate of $1,835,500 (the Trust&#146;s 75% interest in the
total $2,447,333 settlement) was included by BROG in calculating the
Trust&#146;s Royalty payment in connection with the settlement of certain joint
interest audit issues.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">In April&nbsp;2003, as part of a settlement between BROG and the Mineral
Management Service of the United States Department of the Interior
relating to the Underlying Properties, $901,776 (the Trust&#146;s 75% interest
in the total $1,202,368 settlement) was deducted by BROG in calculating
the Trust&#146;s Royalty payment.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">In July&nbsp;2004, BROG adjusted the capital expenditures accrued for the
Underlying Properties for the month of July by approximately $1&nbsp;million,
resulting in a corresponding increase in the Royalty income received by
the Trust in July&nbsp;2004.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">13
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<P align="left" style="font-size: 10pt"><B>Contractual Obligations</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Indenture governing the Trust, the Trustee is entitled to an
administrative fee for its administrative services and the preparation of
quarterly and annual statements of: (i)&nbsp;1/20 of 1% of the first $100&nbsp;million of
the annual gross revenue of the Trust, and 1/30 of 1% of the annual gross
revenue of the Trust in excess of $100&nbsp;million and (ii)&nbsp;the Trustee&#146;s standard
hourly rates for time in excess of 300 hours annually. As of January&nbsp;1, 2003,
the administrative fee due under items (i)&nbsp;and (ii)&nbsp;above will not be less than
$36,000 per year (as adjusted annually to reflect the increase, if any, in the
Producers Price Index as published by the U.S. Department of Labor, Bureau of
Labor Statistics).


<P align="left" style="font-size: 10pt"><B>Effects of Securities Regulation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a publicly-traded trust listed on the New York Stock Exchange (the
&#147;NYSE&#148;), the Trust is and will continue to be subject to extensive regulation
under, among others, the Securities Act of 1933, the Securities Exchange Act of
1934, the rules and regulations of the NYSE and the Sarbanes-Oxley Act of 2002.
Issuers failing to comply with such authorities risk serious consequences,
including criminal as well as civil and administrative penalties. In most
instances, these laws, rules and regulations do not specifically address their
applicability to publicly-traded trusts, such as the Trust. In particular, the
Sarbanes-Oxley Act of 2002 provides for the adoption by the Securities and
Exchange Commission (the &#147;Commission&#148;) and NYSE of certain rules and
regulations that may be impossible for the Trust to literally satisfy because
of its nature as a pass-through trust. For example, the Commission is required
to adopt rules and regulations pursuant to the Sarbanes-Oxley Act of 2002 that
would require a publicly-traded company&#146;s board of directors, audit committee
or executive directors (or similar body) to act with respect to certain
corporate governance matters. The Trust does not have, nor does the Indenture
governing the Trust provide for, a board of directors, an audit committee or
any executive officers. Accordingly, the Trust could not literally comply with
such rules and regulations. It is the Trustee&#146;s intention to follow the
Commission&#146;s and NYSE&#146;s rulemaking closely, attempt to comply with such rules
and regulations and, where appropriate, request relief from these rules and
regulations. However, if the Trust is unable to comply with such rules and
regulations or to obtain appropriate relief, the Trust may be required to
expend as yet unknown but potentially material costs to amend the Indenture
that governs the Trust to allow for compliance with such rules and regulations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2003, the Commission adopted rules implementing legislation
concerning governance matters for publicly-held entities that was passed as
part of the Sarbanes-Oxley Act of 2002. In addition, the NYSE adopted
additional corporate governance rules. Not all of the governance requirements
are applicable to passive entities such as the Trust.


<P align="left" style="font-size: 10pt"><B>Critical Accounting Policies</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the Commission&#146;s staff accounting bulletins and
consistent with other royalty trusts, the financial statements of the Trust are
prepared on the following basis:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalty income recorded for a month is the amount
computed and paid by BROG to the Trustee for the Trust.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Trust expenses recorded are based on liabilities paid and
cash reserves established from Royalty income for liabilities and
contingencies.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Distributions to Unit Holders are recorded when declared
by the Trustee.</TD>
</TR>



</TABLE>

<P align="center" style="font-size: 10pt">14
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Conveyance which transferred the Royalty to the Trust
provides that any excess of production costs applicable to the
Underlying Properties over gross proceeds from such properties
must be recovered from future net profits before Royalty income is
again paid to the Trust.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of the Trust differ from financial statements
prepared in accordance with GAAP because revenues are not accrued in the month
of production; certain cash reserves may be established for contingencies which
would not be accrued in financial statements prepared in accordance with GAAP;
expenses are recorded when paid instead of when incurred; and amortization of
the Royalty calculated on a unit-of-production basis is charged directly to
trust corpus instead of as an expense.

<!-- link2 "Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust invests in no derivative financial instruments and has no
foreign operations or long-term debt instruments. The Trust is a passive
entity and is prohibited from engaging in borrowing transactions, other than
the Trust&#146;s ability to borrow money periodically as necessary to pay expenses,
liabilities and obligations of the Trust that cannot be paid out of cash held
by the Trust. The amount of any such permitted borrowings is unlikely to be
material to the Trust. The Trust periodically holds short-term investments
acquired with funds held by the Trust pending distribution to Unit Holders and
funds held in reserve for the payment of Trust expenses and liabilities.
Because of the short-term nature of these borrowings and investments and
certain limitations upon the types of such investments which may be held by the
Trust, the Trustee believes that the Trust is not subject to any material
interest rate risk. The Trust does not engage in transactions in foreign
currencies which could expose the Trust or Unit Holders to any foreign currency
related market risk. The Trust does not market the gas, oil and/or natural gas
liquids from the Underlying Properties. BROG is responsible for such
marketing.

<!-- link2 "Item&nbsp;4. Controls and Procedures" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;4. Controls and Procedures.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust maintains a system of disclosure controls and procedures that is
designed to provide reasonable assurance that information required to be
disclosed in the Trust&#146;s filings under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported, within the time periods specified
in the Commission&#146;s rules and forms. Disclosure controls and procedures
include controls and procedures designed to ensure that information required to
be disclosed by the Trust is accumulated and communicated by BROG to the
Trustee and its employees who participate in the preparation of the Trust&#146;s
periodic reports to allow timely decisions regarding disclosure. Due to the
pass-through nature of the Trust, BROG provides much of the information
disclosed in this Form 10-Q and the other periodic reports filed by the Trust
with the Commission.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture does not require BROG to update or provide information to
the Trust. Under the Conveyance transferring the Royalty to the Trust, BROG is
obligated to provide the Trust with certain information concerning calculations
of net proceeds owed to the Trust, among other information. Pursuant to the
settlement of litigation in 1996 between the Trust and BROG, BROG agreed to
new, more formal financial reporting and audit procedures as compared to those
provided in the Conveyance.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee receives periodic updates from BROG regarding activities
related to the Trust. Accordingly, the Trust&#146;s ability to timely report
certain information required to be disclosed in the Trust&#146;s periodic reports is
dependent on BROG&#146;s timely delivery of such information to the Trust. In order
to help ensure the accuracy and completeness of the information required to be
disclosed in the Trust&#146;s periodic reports, the Trust employs independent public
accountants, joint interest auditors, marketing consultants, attorneys and
petroleum engineers. These outside professionals advise the Trustee in its
review and


<P align="center" style="font-size: 10pt">15
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">compilation of this information for inclusion in this Form 10-Q and the
other periodic reports provided by the Trust to the Commission.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee has evaluated the Trust&#146;s disclosure controls and procedures
as of September&nbsp;30, 2004, and has determined that, subject to BROG&#146;s delivery
of timely and accurate information to the Trust, such disclosure controls and
procedures are effective. The Trustee has not reviewed the Trust&#146;s disclosure
controls and procedures in concert with management, a board of directors or an
independent audit committee. The Trust does not have, nor does the Indenture
provide for, officers, a board of directors or an independent audit committee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the quarter ended September&nbsp;30, 2004, there were no changes in the
Trust&#146;s internal control over financial reporting (as defined in Rule&nbsp;13a-15(f)
of the Securities Exchange Act of 1934) that materially affected, or are
reasonably likely to materially affect, the Trust&#146;s internal control over
financial reporting. The Trustee has not evaluated the Trust&#146;s internal
control over financial reporting in concert with management, a board of
directors or an independent audit committee. The Trust does not have, nor does
the Indenture provide for, officers, a board of directors or an independent
audit committee.

<!-- link1 " PART II OTHER INFORMATION" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center" style="font-size: 10pt"><B>PART II<BR>
OTHER INFORMATION</B>


<!-- link2 "Item&nbsp;1. Legal Proceedings" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;1. Legal Proceedings.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed above under Part&nbsp;I, Item&nbsp;4 (Controls and Procedures), due to
the pass-through nature of the Trust, BROG provides much of the information
disclosed in this Form 10-Q and the other periodic reports filed by the Trust
with the Commission. Although the Trustee receives periodic updates from BROG
regarding activities which may relate to the Trust, the Trust&#146;s ability to
timely report certain information required to be disclosed in the Trust&#146;s
periodic reports is dependent on BROG&#146;s timely delivery of the information to
the Trust.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust is not aware of any material developments in, or the termination
of, any of the legal proceedings disclosed under Part&nbsp;I, Item&nbsp;3 of the Trust&#146;s
Annual Report on Form 10-K for the year ended December&nbsp;31, 2003, filed with the
Commission on March&nbsp;15, 2004 (the &#147;Annual Report&#148;). The Trust is not named as
a party, nor are its assets subject, to any legal proceedings including,
without limitation, those legal proceedings disclosed in the Annual Report.
Should any such legal proceeding be decided in a manner adverse to BROG, the
amount of Royalty income received by the Trust could materially decrease. The
Trust has not received from BROG any estimate of the amount of any potential
loss in such proceedings, or the portion of any such potential loss that might
be allocated to the Royalty.

<!-- link2 "Item&nbsp;6. Exhibits" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="left" style="font-size: 10pt"><B>Item&nbsp;6. Exhibits.</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Royalty Trust Indenture, dated September
30, 2002 (the original Royalty Trust Indenture, dated November&nbsp;1,
1980 having been entered into between Southland Royalty Company and
The Fort Worth National Bank, as Trustee), heretofore filed as
Exhibit&nbsp;99.2 to the Trust&#146;s Current Report on Form&nbsp;8-K filed with the
Commission on October&nbsp;1, 2002, is incorporated herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Net Overriding Royalty Conveyance from Southland Royalty
Company to the Fort Worth National Bank, as Trustee, dated November
3, 1980 (without Schedules), heretofore filed as Exhibit&nbsp;4(b) to the
Trust&#146;s Annual Report on Form&nbsp;10-K filed with the Commission for the
fiscal year ended December&nbsp;31, 1980, is incorporated herein by
reference.</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">16
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4(c)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assignment of Net Overriding Interest (San Juan Basin Royalty
Trust), dated September&nbsp;30, 2002, between Bank One, N.A. and
TexasBank, heretofore filed as Exhibit&nbsp;4(c) to the Trust&#146;s Quarterly
Report on Form&nbsp;10-Q filed with the Commission for the quarter ended
September&nbsp;30, 2002, is incorporated herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification required by Rule&nbsp;13a-14(a), dated November&nbsp;8,
2004, by Lee Ann Anderson, Vice President and Trust Officer of
TexasBank, the Trustee for the Trust.**</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification required by Rule&nbsp;13a-14(b), dated November&nbsp;8,
2004, by Lee Ann Anderson, Vice President and Trust Officer of
TexasBank, on behalf of TexasBank, the Trustee of the Trust.***</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">**</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Filed herewith.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">***</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Furnished herewith.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">17
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<!-- link1 " SIGNATURES" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">TEXASBANK, AS TRUSTEE FOR</TD>
</TR>

<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" valign="top" align="left">THE SAN JUAN BASIN ROYALTY TRUST</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Lee Ann Anderson</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR align="left" size="1" noshade width="100%"></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lee Ann Anderson</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Trust Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Date: November&nbsp;8, 2004



<P align="center" style="font-size: 10pt">(The Trust has no directors or executive officers.)





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link1 " INDEX TO EXHIBITS" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center" style="font-size: 10pt"><B>INDEX TO EXHIBITS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Royalty Trust Indenture, dated September&nbsp;30,
2002 (the original Royalty Trust Indenture, dated November&nbsp;1, 1980
having been entered into between Southland Royalty Company and The
Fort Worth National Bank, as Trustee), heretofore filed as Exhibit
99.2 to the Trust&#146;s Current Report on Form&nbsp;8-K filed with the
Commission on October&nbsp;1, 2002, is incorporated herein by
reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4(b)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Net Overriding Royalty Conveyance from Southland Royalty Company
to the Fort Worth National Bank, as Trustee, dated November&nbsp;3,
1980 (without Schedules), heretofore filed as Exhibit&nbsp;4(b) to the
Trust&#146;s Annual Report on Form&nbsp;10-K filed with the Commission for
the fiscal year ended December&nbsp;31, 1980, is incorporated herein by
reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4(c)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assignment of Net Overriding Interest (San Juan Basin Royalty
Trust), dated September&nbsp;30, 2002, between Bank One, N.A. and
TexasBank, heretofore filed as Exhibit&nbsp;4(c) to the Trust&#146;s
Quarterly Report on Form&nbsp;10-Q filed with the Commission for the
quarter ended September&nbsp;30, 2002, is incorporated herein by
reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification required by Rule&nbsp;13a-14(a), dated November&nbsp;8, 2004,
by Lee Ann Anderson, Vice President and Trust Officer of
TexasBank, the Trustee for the Trust.**</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification required by Rule&nbsp;13a-14(b), dated November&nbsp;8, 2004,
by Lee Ann Anderson, Vice President and Trust Officer of
TexasBank, on behalf of TexasBank, the Trustee of the Trust.***</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">**</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Filed herewith</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">***</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Furnished herewith</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>d19834exv31.htm
<DESCRIPTION>CERTIFICATION REQUIRED BY RULE 13A-14(A)
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<P align="right" style="font-size: 10pt">Exhibit&nbsp;31



<P align="center" style="font-size: 10pt"><B>CERTIFICATION</B>



<P align="left" style="font-size: 10pt">I, Lee Ann Anderson, certify that:



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;I have reviewed this Quarterly Report on Form 10-Q of San Juan Basin
Royalty Trust, for which TexasBank acts as Trustee;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, distributable income and changes in trust corpus of
the registrant as of, and for, the periods presented in this report;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) for
the registrant and I have:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under my
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
me by others within those entities, particularly during the period in
which this report is being prepared;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluated the effectiveness of the registrant&#146;s disclosure
controls and procedures and presented in this report my conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disclosed in this report any change in the registrant&#146;s
internal control over financial reporting that occurred during the
registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant&#146;s internal control over financial reporting; and</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;I have disclosed, based on my most recent evaluation of internal
control over financial reporting, to the registrant&#146;s auditors:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant&#146;s
ability to record, process, summarize and report financial
information; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any fraud, whether or not material, that involves persons who
have a significant role in the registrant&#146;s internal control over
financial reporting.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">In giving the certifications in paragraphs 4 and 5 above, I have relied to the
extent I consider reasonable on information provided to me by Burlington
Resources Oil &#038; Gas Company LP.



<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top">&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>Date:  November 8, 2004&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000">/s/ Lee Ann Anderson
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">Lee Ann Anderson&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">Vice President and Trust Officer, TexasBank&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>d19834exv32.htm
<DESCRIPTION>CERTIFICATION REQUIRED BY RULE 13A-14(B)
<TEXT>
<HTML>
<HEAD>
<TITLE>exv32</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<P align="right" style="font-size: 10pt">Exhibit&nbsp;32



<P align="center" style="font-size: 10pt"><B>CERTIFICATION OF<BR>
THE TRUSTEE*<BR>
OF THE SAN JUAN BASIN ROYALTY TRUST<BR>
PURSUANT TO 18 U.S.C. &#167; 1350</B>




<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the accompanying report on Form 10-Q for the quarter
ended September&nbsp;30, 2004, and filed with the Securities and Exchange Commission
on the date hereof (the &#147;Report&#148;), I, Lee Ann Anderson, Vice President and
Trust Officer of TexasBank, on behalf of TexasBank, the Trustee of the San Juan
Basin Royalty Trust (the &#147;Trust&#148;), not in its individual capacity but solely as
Trustee of the Trust, hereby certify that:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies in all material respects with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (as explained in Note 1 to the Trust&#146;s financial statements
contained in the Report, in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No.&nbsp;47, released September&nbsp;16,
1982, the Trust prepares its financial statements in a manner that
differs from generally accepted accounting principles; such
presentation is customary to other royalty trusts); and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Trust.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TEXASBANK, AS TRUSTEE OF THE</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SAN JUAN BASIN ROYALTY TRUST</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By: /s/ Lee Ann Anderson</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR align="left" size="1" noshade width="100%"></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name: Lee Ann Anderson</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Vice President and Trust Officer</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date: November&nbsp;8, 2004</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">* The Trust has no executive officers.




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
