December 21, 2001; Unusual Opportunity in San Juan Basin Royalty Trust (SJT)

One of our favorite stocks, on which we do weekly calculations, is down sharply today, 15% to 8.69 at one point. At midday yesterday, the trustee disclosed that there would be no distribution for the month instead of a usual positive number. We are not surprised as we expected $0.01 with a possibility of $0.00 as detailed in Meter Reader. Nonetheless volumes were also low and development expenditures high. Low volume when price is low is a long-term positive as is high development spending. On the short term negative side there may be no distribution declared next month, as a deficit must be repaid before distributions are made. We are confident in our Buy recommendation of the stock. The risk is that the slide in natural gas prices in recent months translates to sharply lower futures prices. Were that to happen, other stocks would also be affected adversely. See December 21, 2001; Intraday Release: SJT Tables for details on present value as well as quarterly and monthly projections.