San Juan Basin Royalty Trust (SJT - 9 3/16)

Operator's Shortchanging Disclosed

Three corrections to past statements, one positive, one neutral and one negative, may be confusing, but should not obscure the appeal of new investment in SJT for participation in high-quality natural gas reserves. Burlington Resources (BR), the operator of most of the trust's properties, admits it failed to compensate the trust by at least $3.5 million (almost $0.08 per unit) for payments owed by natural gas purchasers to the trust on properties not operated by Burlington. The trust's consultants uncovered the discrepancy.

In what appears to have no impact on our projections, the trust also disclosed in its Form 10-Q for the first quarter of 2000, filed last week with the Securities and Exchange Commission, that BR overstated producing volumes last year. Since our projections key off of first quarter 2000 results, presumed to be accurate, we make no change. One could say discovering the error is a positive because it implies less decline from year to year.

Finally, we now know why operating costs were abnormally high the past two months. BR has withheld approximately $0.02 per unit from distributions in each month to recover an undercharge for last year. Apparently the full amount has now been recovered. In our opinion, this material action should have been disclosed to unitholders before the fact of withholding, rather than after.

BR also estimates that development spending will be about a million dollars higher than we previously estimated for 2000. The difference is not enough to cause us to post a new financial model immediately.

Kurt H. Wulff

May 23, 2000

Analyses are prepared from original sources and data believed to be reliable, but no representations are made as to their accuracy or completeness. This summary with supporting documentation is available free at http://royaltytrusts.intranets.com. Registration code: sanjuan