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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 1-8032
 San Juan Basin Royalty
    Trust
 (Exact name of registrant as
    specified in the Amended and Restated San Juan Basin
    Royalty Trust Indenture)
  Texas(State or other
    jurisdiction of
    incorporation or organization)

75-6279898(I.R.S. Employer
    Identification No.)Compass Bank
    2525 Ridgmar Boulevard, Suite 100
    Fort Worth, Texas(Address of principal
    executive offices)

76116(Zip Code)  (866) 809-4553
  (Registrants telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredUnits of Beneficial Interest

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
 (Title of Class)
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IITEM 1. BUSINESSITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESPART IIITEM 5. MARKET FOR REGISTRANTS UNITS, RELATED UNIT HOLDER MATTERS AND ISSUER PURCHASES OF UNITSITEM 6. SELECTED FINANCIAL DATAITEM 7. TRUSTEES DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9A(T). CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SECURITY HOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESNet Overriding Royalty ConveyanceAnnual Report to Unit HoldersConsent of Cawley, Gillespie & Associates, Inc.Certification Required by Rule 13a-14(a)Certification Required by Rule 13a-14(b)    Table of Contents  
  PART I
  Form 10-K
 
  ITEM 1.
    BUSINESS  (866) 809-4553). www.sjbrt.com.
           2




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3




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ITEM 1A.
    RISK
    FACTORS  Form 10-K,
  Oil
    and gas prices fluctuate due to a number of factors, and lower
    prices will reduce net proceeds to the Trust and distributions
    to Unit Holders.
  month-to-month
  
    political conditions worldwide, in particular political
    disruption, war or other armed conflicts in oil producing
    regions;
    worldwide economic conditions;
    weather conditions;
    the supply and price of foreign oil and gas;
    the level of consumer demand;
    the price and availability of alternative fuels;
    the proximity to, and capacity of, transportation
    facilities; and
    the effect of worldwide energy conservation measures. 4




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Increased
    costs of production and development will result in decreased
    Trust distributions.
      Trust
    reserve estimates depend on many assumptions that may prove to
    be inaccurate, which could cause both estimated reserves and
    estimated future revenues to be too high.
    
    historical production from the area compared with production
    rates from similar producing areas;
    the assumed effect of governmental regulation; and
    assumptions about future commodity prices, production and
    development costs, severance and excise taxes, and capital
    expenditures.    The
    operators of the Underlying Properties are subject to extensive
    governmental regulation.
    Operating
    risks for BROG and other operators of the Underlying Properties
    can adversely affect Trust distributions.
   5




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None
    of the Trustee, the Trust nor the Unit Holders control the
    operation or development of the Underlying
    Properties.
    The
    Royalty can be sold and the Trust can be terminated in certain
    circumstances.
    Mineral
    properties, such as the Underlying Properties, are depleting
    assets and, if BROG or other operators of the Underlying
    Properties do not perform additional development projects, the
    assets may deplete faster than expected.
    Unit
    Holders have limited voting rights.
   
  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   
  ITEM 2.
    PROPERTIES      Producing
    Acreage, Wells and Drilling
   6




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and/or
  80-acre
 7




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160-acre Eighty-acre
  Oil and
    Gas Production
    2006


2005


2004Gas


Oil


Gas


Oil


Gas


Oil(Mcf)


(Bbls)


(Mcf)


(Bbls)


(Mcf)


(Bbls)Production


22,475,405



40,702



26,600,644



43,142



25,324,435



44,832Average Price

$
6.55


$
61.30


$
6.27


$
49.62


$
4.68


$
34.81   Pricing
    Information
            year-to-year year-to-year
 8




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year-to-year
    Oil and
    Gas Reserves
  Form 10-K:
  Form 10-K
         9




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Crude


NaturalOil


Gas(Bbls)


(Mcf)Reserves as of December 31,
    2003


382



240,609Revisions of previous estimates


102



26,415Extensions, discoveries and other
    additions


20



15,236Production


(45
)


(25,324
)Reserves as of December 31,
    2004


459



256,936Revisions of previous estimates


15



14,401Extensions, discoveries and other
    additions


23



17,023Production


(43
)


(26,601
)Reserves as of December 31,
    2005


454



261,759Revisions of previous estimates


(33
)


(27,467
)Extensions, discoveries and other
    additions


20



8,644Production


(41
)


(22,475
)Reserves as of December 31,
    2006


400



220,461     2006


2005


2004Crude Oil (Bbls)


357



395



419Natural Gas (Mcf)


197,466



231,235



235,272   and/or and/or
    10




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2006


2005


2004Balance, January 1

$
1,090,324


$
756,017


$
497,701Revisions of prior-year estimates,
    change in prices and other


(345,237
)


339,865



272,251Extensions, discoveries and other
    additions


28,520



72,698



47,338Accretion of discount


109,032



75,602



49,770Royalty Income


(136,312
)


(153,858
)


(111,043
)Balance, December 31

$
746,327


$
1,090,324


$
756,017             2006


2005


2004Estimated


Present


Estimated


Present


Estimated


PresentFuture


Value


Future


Value


Future


ValueNet


at


Net


at


Net


atRevenue


10%


Revenue


10%


Revenue


10%Total Proved

$
1,337,575


$
746,327


$
2,018,722


$
1,090,324


$
1,382,108


$
756,017Proved Developed

$
1,198,784


$
677,276


$
1,785,597


$
965,615


$
1,264,556


$
696,430Total Proved Per Unit

$
28.70


$
16.01


$
43.31


$
23.39


$
29.65


$
16.22    11




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Regulation
      Federal
    Natural Gas Regulation
          Section 45
    Tax Credit
   12




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Passive
    Loss Rules
    Other
    Regulation
    ITEM 3.
    LEGAL
    PROCEEDINGS  Form 10-K
  San Juan Basin Royalty Trust vs.
    Burlington Resources Oil & Gas Company
    LP. Burlington Resources Oil &
    Gas Company LP vs. San Juan Basin Royalty Trust No. 2005-74370, st No. 01-06-00485-CV
 13




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   
  PART II
 
  ITEM 5.
    MARKET
    FOR REGISTRANTS UNITS, RELATED UNIT HOLDER MATTERS AND
    ISSUER PURCHASES OF UNITS   
  ITEM 6.
    SELECTED
    FINANCIAL DATA  2006


2005


2004


2003


2002Royalty Income

$
136,311,892


$
153,858,264


$
111,042,767


$
91,997,262


$
38,053,281Distributable income


135,867,325



151,560,081



109,390,735



90,357,837



36,417,967Distributable income per Unit


2.915055



3.251747



2.346998



1.938644



0.781354Distributions per Unit


2.915055



3.251747



2.346998



1.938644



0.781354Total assets, December 31


26,481,276



43,054,656



36,814,866



36,905,104



37,972,696  
  ITEM 7.
    TRUSTEES
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATION   
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  and/or
 
  ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA   14




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ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE   
  ITEM 9A.
    CONTROLS
    AND PROCEDURES  Form 10-K
    Form 10-K
  Rule 13a-15(f)
  Rule 13a-15(f)
 15




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Trustees
    Report on Internal Control Over Financial Reporting
      Form 10-K,
  Report of
    Independent Registered Public
    Accounting Firm on Internal Control Over Financial
    Reporting
  Internal Control 
    Integrated Framework
     16




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ITEM 9A(T).
    CONTROLS
    AND PROCEDURES   
  ITEM 9B.
    OTHER
    INFORMATION  Form 8-K Form 8-K.
 
  PART III
 
  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT    Section 16(a)
    Beneficial Ownership Reporting Compliance
   
  ITEM 11.
    EXECUTIVE
    COMPENSATION   17




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Name of Individual




Capacities in


Cashor Entity

Year


Which Served


Compensation(1)Compass Bank(2)


2006



Trustee


$
249,924TexasBank


2005



Trustee


$
310,461TexasBank


2004



Trustee


$
259,472     (1)
    
    Under the Indenture, the Trustee is entitled to an
    administrative fee for its administrative services and the
    preparation of quarterly and annual statements of: (i) 1/20
    of 1% of the first $100 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 million and (ii) the
    Trustees standard hourly rates for time in excess of
    300 hours annually. As of January 1, 2003, the
    administrative fee due under items (i) and (ii) 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).(2)
    
    On March 24, 2006 Compass Bancshares Inc., the parent
    company of Compass Bank, completed its acquisition of TexasBanc
    Holding Co., the parent company of TexasBank, the prior trustee
    of the Trust. On that same date, TexasBank merged with Compass
    Bank, and as a result, Compass Bank succeeded TexasBank as
    Trustee under the terms of the Indenture. On February 16,
    2007, Compass Bancshares, Inc. announced the signing of a
    definitive agreement to be acquired by Banco Bilbao Vizcaya
    Argentaria, S.A (BBVA). Under the terms of that
    agreement, Compass Bancshares, Inc. would become a wholly-owned
    subsidiary of BBVA. The transaction is expected to close in the
    second half of 2007 and is subject to the approval of
    shareholders of BBVA and Compass Bancshares, Inc. as well as to
    regulatory approval and customary closing conditions. 
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED SECURITY HOLDER MATTERS    Security Ownership of Certain Beneficial
    Owners.
  Security Ownership of Trustee.
 
  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS   
  ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   18




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2006


2005Audit Fees

$
71,125


$
76,065Audit-Related Fees


-0-



-0-Tax Fees


5,475



8,085All Other Fees


-0-



-0-Total

$
76,600


$
84,150       B-schedules
     
  PART IV
 
  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K:
  Financial
    Statements
  Form 10-K
  
 19




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Financial
    Statement Schedules
    Exhibits
  ExhibitNumber

Description4(a)


Amended and Restated Royalty Trust
    Indenture, dated September 30, 2002 (the original Royalty
    Trust Indenture, dated November 1, 1980 having been entered
    into between Southland Royalty Company and The Fort Worth
    National Bank, as Trustee), heretofore filed as
    Exhibit 99.2 of the Trusts Current Report on
    Form 8-K
    filed with the SEC on October 1, 2002, is incorporated
    herein by reference.*4(b)


Net Overriding Royalty Conveyance
    from Southland Royalty Company to the Fort Worth National
    Bank, as Trustee, dated November 3, 1980 (without
    Schedules).**4(c)


Assignment of Net Overriding
    Interest (San Juan Basin Royalty Trust), dated
    September 30, 2002, between Bank One, N.A. and TexasBank,
    heretofore filed as Exhibit 4(c) to the Trusts
    Quarterly Report on
    Form 10-Q
    filed with the SEC for the quarter ended September 30,
    2002, is incorporated herein by reference.*10


Indemnification Agreement, dated
    May 13, 2003, with effectiveness as of July 30, 2002,
    by and between Lee Ann Anderson and San Juan Basin Royalty
    Trust, heretofore filed as Exhibit 10(a) to the
    Trusts Quarterly Report on
    Form 10-Q
    filed with the SEC for the quarter ended March 31, 2003, is
    incorporated herein by reference.13


Registrants Annual Report to
    Unit Holders for the fiscal year ended December 31, 2006.**23


Consent of Cawley,
    Gillespie & Associates, Inc., reservoir engineer.**31


Certification required by
    Rule 13a-14(a),
    dated March 1, 2007, by Lee Ann Anderson, Vice President
    and Senior Trust Officer of Compass Bank, the Trustee of
    the Trust.**32


Certification required by
    Rule 13a-14(b),
    dated March 1, 2007, by Lee Ann Anderson, Vice President
    and Senior Trust Officer of Compass Bank on behalf of
    Compass Bank, the Trustee of the Trust.***     *
    
    A copy of this Exhibit is available to any Unit Holder (free of
    charge) upon written request to the Trustee, Compass Bank, 2525
    Ridgmar Boulevard, Suite 100, Fort Worth, Texas 76116.**
    
    Filed herewith.***
    
    Furnished herewith. 20




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SIGNATURE
      By:
    COMPASS
    BANK, AS TRUSTEE OF THE   By:
    /s/  Lee
    Ann Anderson       21




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EXHIBIT INDEX
  ExhibitNumber

Description4(a)


Amended and Restated Royalty Trust
    Indenture, dated September 30, 2002 (the original Royalty
    Trust Indenture, dated November 1, 1980 having been entered
    into between Southland Royalty Company and The Fort Worth
    National Bank, as Trustee), heretofore filed as
    Exhibit 99.2 of the Trusts Current Report on
    Form 8-K
    filed with the SEC on October 1, 2002, is incorporated
    herein by reference.*4(b)


Net Overriding Royalty Conveyance
    from Southland Royalty Company to the Fort Worth National
    Bank, as Trustee, dated November 3, 1980 (without
    Schedules).**4(c)


Assignment of Net Overriding
    Interest (San Juan Basin Royalty Trust), dated
    September 30, 2002, between Bank One, N.A. and TexasBank,
    heretofore filed as Exhibit 4(c) to the Trusts
    Quarterly Report on
    Form 10-Q
    filed with the SEC for the quarter ended September 30,
    2002, is incorporated herein by reference.*10


Indemnification Agreement, dated
    May 13, 2003, with effectiveness as of July 30, 2002,
    by and between Lee Ann Anderson and San Juan Basin Royalty
    Trust, heretofore filed as Exhibit 10(a) to the
    Trusts Quarterly Report on
    Form 10-Q
    filed with the SEC for the quarter ended March 31, 2003, is
    incorporated herein by reference.13


Registrants Annual Report to
    Unit Holders for the fiscal year ended December 31, 2006.**23


Consent of Cawley,
    Gillespie & Associates, Inc., reservoir engineer.**31


Certification required by
    Rule 13a-14(a),
    dated March 1, 2007, by Lee Ann Anderson, Vice President
    and Senior Trust Officer of Compass Bank, the Trustee of
    the Trust.**32


Certification required by
    Rule 13a-14(b),
    dated March 1, 2007, by Lee Ann Anderson, Vice President
    and Senior Trust Officer of Compass Bank, on behalf of
    Compass Bank, the Trustee of the Trust.***     *
    
    A copy of this Exhibit is available to any Unit Holder (free of
    charge) upon written request to the Trustee, Compass Bank, 2525
    Ridgmar Boulevard, Suite 100, Fort Worth, Texas 76116.**
    
    Filed herewith.***
    
    Furnished herewith. 22