<PAGE>
                                                                   EXHIBIT 10.13
<PAGE>





                                [SAN JUAN BASIN
                                 LOYALTY TRUST
                                   2001 LOGO]


<PAGE>

                                     [MAP]

<PAGE>



                                   THE TRUST

The principal asset of the San Juan Basin Royalty Trust (the "Trust") consists
of a 75% net overriding royalty interest carved out of certain oil and gas
leasehold and royalty interests (the "Underlying Interests") in properties
located in the San Juan Basin of northwestern New Mexico.

UNITS OF BENEFICIAL INTEREST

The units of beneficial interest of the Trust ("Units") are traded on the New
York Stock Exchange under the symbol "SJT." At March 28, 2002, the latest
practicable date, the sale price of a Unit was $11.90. From January 1, 2000, to
December 31, 2001, quarterly high and low sales prices and the aggregate amount
of monthly distributions per Unit paid each quarter were as follows:

<Table>
<Caption>

                                                                    Distributions
2001                                        High            Low         Paid
----                                  ------------   ------------   -------------
<S>                                   <C>            <C>            <C>
First Quarter                         $    16.1300   $    12.3125   $    .799474
Second Quarter                             17.9800        12.4000        .563215
Third Quarter                              14.0000        10.0800        .294257
Fourth Quarter                             11.5100         9.3000        .062177
                                                                    ------------
        Total for 2001                                              $   1.719123
                                                                    ============

2000
First Quarter                         $    10.2500   $     9.3125   $    .212160
Second Quarter                             10.1875         9.0625        .283054
Third Quarter                              12.0000         9.6250        .421626
Fourth Quarter                             12.6875        10.1250        .353069
                                                                    ------------
        Total for 2000                                              $   1.269909
                                                                    ============
</Table>

At December 31, 2001, 46,608,796 Units outstanding were held by 2,117 Unit
holders of record. The following table presents information relating to the
distribution of ownership Units:

<Table>
<Caption>

                                                   Number of
Type of Unit Holders                              Unit Holders   Units Held
--------------------                              ------------   ----------
<S>                                               <C>            <C>
Individuals                                           1,835       2,453,481
Fiduciaries                                             225         653,803
Institutions                                             40         284,496
Brokers, Dealers and Nominees                             8      43,113,264
Corporations and Partnerships                             3          88,492
Miscellaneous                                             6          15,260
                                                      -----      ----------

        Total                                         2,117      46,608,796
                                                      =====      ==========
</Table>

                  [HISTORIC NEW MEXICO U.S. 66 ROUTE PICTURE]

<PAGE>

                                 TO UNIT HOLDERS

We are pleased to present the 2001 Annual Report of the San Juan Basin Royalty
Trust. The report includes a copy of the Trust's Annual Report on Form 10-K to
the Securities and Exchange Commission for the year ended December 31, 2001,
without exhibits. The Form 10-K contains important information concerning the
Underlying Interests, including the oil and gas reserves attributable to the net
overriding royalty interest owned by the Trust. Production figures provided in
this letter and in the Trustee's Discussion and Analysis are based on
information provided by Burlington Resources Oil & Gas Company LP ("BROG").

The Trust was established in November 1980 by Trust Indenture between Southland
Royalty Company ("Southland Royalty") and The Fort Worth National Bank. Pursuant
to the Indenture, Southland Royalty conveyed to the Trust a 75% net overriding
royalty interest (equivalent to a net profits interest) carved out of
Southland's oil and gas leasehold and royalty interests in properties in the San
Juan Basin of northwestern New Mexico. This net overriding royalty interest (the
"Royalty") is the principal asset of the Trust.

Under the Trust Indenture, Bank One, NA (successor trustee) as Trustee, has the
primary function of collecting monthly net proceeds ("Royalty Income")
attributable to the Royalty and making the monthly distributions to the Unit
holders after deducting administrative expenses and any amounts necessary for
cash reserves.

Income distributed to Unit holders through November 2001 was $80,126,202 or
$1.719123 per Unit. Distributable income for the first 11 months of 2001
consisted of Royalty Income of $81,368,723 plus interest income of $165,676,
less administrative expenses of $1,216,577, less cash reserves of $191,620. The
Trust did not receive Royalty Income for December 2001, because revenues based
on production during the month of October were less than expenses.

On December 31, 2001, BROG paid the Trust $250,000 as an offset against lease
operating expenses chargeable to the Trust in connection with the settlement of
litigation. The $250,000 and interest income of $840 received in December were
not distributed to Unit holders, but were used to offset December administrative
expenses and to establish a cash reserve.

In September 1988, the Trust was advised by Southland Royalty and its affiliate
Meridian Oil, Inc. ("MOI"), both of which were subsidiaries of Burlington
Resources, Inc., that they had initiated a drilling program in the San Juan
Basin of northwestern New Mexico involving development of coal seam
gas reserves on properties in which the Trust owns an interest. For more
information on the coal seam drilling program and the related federal income tax
credit associated with gas produced from coal seam wells drilled before January
1, 1993, please see the "Description of the Properties" section of this Annual
Report.

On January 2, 1996, Southland Royalty was merged with and became a wholly owned
subsidiary of MOI. Subsequent to the merger, MOI changed its name to Burlington
Resources Oil & Gas Company LP.

Information about the Trust's estimated proved reserves of gas, including coal
seam gas, and of oil as well as the present value of net revenues discounted at
10% can be found in Item 2 of the accompanying Form 10-K.

Certain Royalty Income is generally considered portfolio income under the
passive loss rules enacted by the Tax Reform Act of 1986. Therefore, it appears
that Unit holders should not consider the taxable income from the Trust to be
passive income in determining net passive income or loss. Unit holders should
consult their tax advisors for further information.

Unit holders of record will continue to receive an individualized tax
information letter for each of the quarters ending March 31, June 30 and
September 30, 2002, and for the year ending December 31, 2002. Unit holders
owning Units in nominee name may obtain monthly tax information from the Trustee
upon request.

For readers' convenience, a glossary, which contains definitions, will be found
on page four. Please visit our Web site at www.sjbrt.com to access news
releases, reports, SEC filings and tax information.



Bank One, NA, Trustee

By: /s/ LEE ANN ANDERSON
Lee Ann Anderson
Vice President

2
<PAGE>


                          [PHOTO OF OLD ROUTE 66 SIGN]

<PAGE>




                                GLOSSARY OF TERMS

<Table>

<S>                                     <C>
AGGREGATE MONTHLY DISTRIBUTION: An      NET ACRES OR WELLS: The interests
amount paid to Unit holders equal       of BROG in such acres or wells.
to the royalty income received by
the Trustee during a calendar month     NET OVERRIDING ROYALTY INTEREST: A
plus interest, less the general and     share of gross production from a
administrative expenses of the          property, measured by net profits
Trust, adjusted by any changes in       from operation of the property and
cash reserves.                          carved out of the working interest,
                                        i.e., a net profits interest.
BBL: Barrel, generally 42 U.S.
gallons measured at 60(degrees)F.       NET PROCEEDS: The excess of Gross
                                        Proceeds received by BROG during a
BCF: Billion cubic feet.                particular period over Production
                                        Costs for such period.
BROG: Burlington Resources Oil &
Gas Company LP.                         PAYADD: Completion in an existing
                                        well of additional productive
BTU: British thermal unit; the          zone(s) within a producing
amount of heat necessary to raise       formation.
the temperature of one pound of
water one degree Fahrenheit.            PRESENT VALUE OF ESTIMATED FUTURE
                                        NET REVENUES: The present value of
COAL SEAM WELL: A well completed to     the Estimated Future Net Revenues
a coal deposit found to contain and     computed using a discount rate of
emit natural gas.                       10%.

COMMINGLED WELL: A well which           PRODUCTION COSTS: Costs incurred on
produces from two or more               an accrual basis by BROG in
formations through a common well        operating the Underlying
casing and a single tubing string.      Properties, including both capital
                                        and non-capital costs and
CONVENTIONAL WELL: A well completed     including, for example, development
to a formation historically found       drilling, production and processing
to contain deposits of oil or gas       costs, applicable taxes and
(for example, in the San Juan           operating charges.
Basin, the Pictured Cliffs, Dakota
and Mesaverde formations) and           PROVED DEVELOPED RESERVES: Those
operated in the conventional            Proved Reserves which can be
manner.                                 expected to be recovered through
                                        existing wells with existing
DEPLETION: The exhaustion of a          equipment and operating methods.
petroleum reservoir; the reduction
in value of a wasting asset by          PROVED RESERVES: Those estimated
removing minerals; for tax              quantities of crude oil, natural
purposes, the removal and sale of       gas and natural gas liquids, which,
minerals from a mineral deposit.        upon analysis of geological and
                                        engineering data, appear with
DISTRIBUTABLE INCOME: An amount         reasonable certainty to be
paid to Unit holders equal to the       recoverable in the future from
royalty income received by the          known oil and gas reservoirs under
Trustee during a given period plus      existing economic and operating
interest, less the general and          conditions.
administrative expenses of the
Trust, adjusted by any changes in       PROVED UNDEVELOPED RESERVES: Those
cash reserves.                          Proved Reserves which are expected
                                        to be recovered from new wells on
DUAL COMPLETION: The completion of      undrilled acreage, or from existing
a well into two separate producing      wells where a relatively major
formations at different depths,         expenditure is required.
generally through one string of
pipe producing from one of the          RECAVITATED WELL: A coal seam well,
formations, inside of which is a        the production from which has been
smaller string of pipe producing        enhanced or extended by the
from the other formation.               enlargement of the cavity within
                                        the coal deposit to which the well
ESTIMATED FUTURE NET REVENUES: An       has been completed.
estimate computed by applying
current prices of oil and gas (with     RECOMPLETED WELL: A well completed
consideration of price changes only     by drilling a separate well-bore
to the extent provided by               from an existing casing in order to
contractual arrangements and            reach the same reservoir, or
allowed by federal regulation) to       re-drilling the same well bore to
estimated future production of          reach a new reservoir after
proved oil and gas reserves as of       production from the original
the date of the latest balance          reservoir has been abandoned.
sheet presented, less estimated
future expenditures (based on           ROYALTY: The principal asset of the
current costs) to be incurred in        Trust; the 75% net overriding
developing and producing the proved     royalty interest conveyed to the
reserves, and assuming continuation     Trust on November 3, 1980, by
of existing economic conditions;        Southland Royalty Company, the
sometimes referred to as "estimated     predecessor to BROG, which was
future net cash flows."                 carved out of the Underlying
                                        Interests.
GRANTOR TRUST: A trust (or portion
thereof) with respect to which the      ROYALTY INCOME: The monthly Net
grantor or an assignee of the           Proceeds attributable to the
grantor, rather than the trust, is      Royalty.
treated as the owner of the trust
properties and is taxed directly on     SECTION 29 TAX CREDIT: A federal
the trust income for Federal income     income tax credit available under
tax purposes under Sections 671         Section 29 of the Internal Revenue
through 679 of the Internal Revenue     Code for producing coal seam gas
Code.                                   (and other nonconventional fuels)
                                        from wells drilled prior to January
GROSS ACRES OR WELLS: The interests     1, 1993, to a formation beneath a
of all persons owning interests in      qualifying coal seam formation, and
such acres or wells.                    for production from wells drilled
                                        after December 31, 1979, but prior
GROSS PROCEEDS: The amount received     to January 1, 1993, which are later
by BROG (or any subsequent owner of     completed into such a formation.
the Underlying Interests) from the
sale of the production attributable     SPOT PRICE: The price paid for gas,
to such interests.                      oil or oil products sold under
                                        contracts for the purchase and sale
INFILL DRILLING: The drilling of        of such minerals on a short-term
wells intended to be completed to       basis.
proven reservoirs or formations,
sometimes occurring in conjunction      UNDERLYING INTERESTS: The working,
with regulatory approval for            royalty and other interests owned
increased density in the spacing of     by Southland Royalty Company, the
wells.                                  predecessor to BROG, in properties
                                        located in the San Juan Basin of
LEASE OPERATING EXPENSES: Expenses      northwest New Mexico, out of which
incurred in the operation of a          the Royalty was carved.
producing property as apportioned
among the several parties in            UNDERLYING PROPERTIES: The real
interest.                               property located in the San Juan
                                        Basin of northwestern New Mexico
MCF: 1,000 cubic feet; the standard     burdened by the Underlying
unit for measuring the volume of        Interests.
natural gas.
                                        UNITS OF BENEFICIAL INTEREST: The
MMBTU: One million British thermal      units of ownership of the Trust,
units.                                  equal to the number of shares of
                                        common stock of Southland Royalty
MULTIPLE COMPLETION WELL: A well        Company outstanding at the close of
which produces simultaneously           business on November 3, 1980.
through separate tubing strings
from two or more producing horizons     WORKING INTEREST: The operating
or alternatively from each.             interest under an oil and gas
                                        lease.
</Table>
<PAGE>
                          DESCRIPTION OF THE PROPERTIES

The principal asset of the Trust is a 75% net overriding royalty interest carved
out of certain working, royalty and other interests owned by BROG (the
"Underlying Interests") in properties located in the San Juan Basin, and more
particularly in San Juan, Rio Arriba and Sandoval Counties of northwestern New
Mexico (the "Underlying Properties"). The Underlying Properties contain 151,900
gross (119,000 net) producing acres and 3,305 gross (976 net) producing wells,
including dual completions.

     The Underlying Properties have historically produced gas primarily from
conventional wells drilled to three major formations: the Pictured Cliffs, the
Mesaverde and the Dakota, ranging in depth from 1,500 to 8,000 feet. The
characteristics of these reservoirs result in the wells having very long
productive lives. A production index for oil and gas properties is the number of
years derived by dividing remaining reserves by current production. Based upon
the reserve report prepared by independent petroleum engineers as of December
31, 2001, the production index for the Underlying Properties is estimated to be
approximately nine years. The production index is subject to change from year to
year based on reserve revisions and production levels. Among the factors
considered by engineers in estimating remaining reserves of natural gas is the
current sales price for gas. As the sales price increases, the producer can
justify expending higher lifting costs and therefore reasonably expect to
recover more of the known reserves. Accordingly, as gas prices rise the
production index increases and vice versa.

     In 1998, BROG announced that the New Mexico Oil Conservation Division
approved plans for 80-acre infill drilling of the Mesaverde formation in the San
Juan Basin. The Mesaverde formation was originally developed in the 1950s on
320-acre spacing, with infill drilling initiated in the early 1970s on 160-acre
spacing. In 1994, BROG undertook an extensive study of the Mesaverde formation.
Results indicated that downspaced drilling (infill drilling) on 80-acre spacing
could significantly increase recoverable gas reserves in this reservoir. A pilot
program began in 1997 and was expanded in 1998 to include two additional areas.
In February 2002, BROG informed the Trust that the New Mexico Oil Conservation
Division has approved plans for 80-acre infill drilling in the Dakota formation
in the San Juan Basin.

     During 1988, a drilling program was initiated involving development of
Fruitland Coal gas reserves. Wells drilled in the Fruitland Coal range in depth
from 2,500 to 3,500 feet, generally on 320-acre spacing. BROG has informed the
Trust that based on its success in 1997 it anticipates increasing the density of
its drilling operations in the Fruitland Coal, with wells drilled on 160- and
80-acre spacing.

     The process of removing coal seam gas is often referred to as
degasification or desorption. Millions of years ago, natural gas was generated
in the process of coal formation and adsorbed into the coal. Water later filled
the natural fracture system. When the water is removed from the natural fracture
system, reservoir pressure is lowered and the gas desorbs from the coal. The
desorbed gas then flows through the fracture system and is produced at the well
bore. The volume of formation water production typically declines with time and
the gas production may increase for a period of time before starting to decline.
In order to dispose of the formation water, surface facilities including pumping
units are required, which results in the cost of a completed well being as much
as $500,000. During 2001, these coal seam wells produced a total of
approximately 12,150,000 MMBtu of gas from the Underlying Properties, which was
sold at an average price of $3.15 per MMBtu.

     Production from coal seam wells drilled prior to January 1, 1993, qualifies
for federal income tax credits through 2002. For 2001, the credit was
approximately $1.08 per MMBtu. During 2001, potential Section 29 tax credits of
approximately $.138766 per Unit were generated for Trust Unit holders from
production from coal seam wells.

     BROG revised its 2001 capital budget estimate for the Underlying Properties
upward from $30.2 million to $38.8 million. BROG's capital plan for the
Underlying Properties for 2001 estimated 406 projects, including the drilling of
49 new wells operated by BROG. In 2001, BROG actually participated in 663
projects, including 61 new wells operated by BROG. BROG informed the Trust that
the upward revision was due to the fact that service costs had been expected to
increase approximately 10% in 2001 as compared to the prior year. However, BROG
indicates that as a result of higher commodity prices in 2001 and a resulting
increased demand for equipment and services, some costs actually increased in
2001 by as much as 40%. In addition, the Bureau of Land Management has
undertaken an environmental impact study of the entire San Juan Basin such that
new drilling activity located more than 300 feet from an existing road now
requires an additional level of regulatory approval on a well-by-well basis.
More regulatory approvals to drill were obtained in 2001 than expected, which
resulted in an increase in drilling activity.

     The aggregate capital expenditures reported by BROG in calculating
distributable income for 2001 include approximately $9,250,000 attributable to
the capital budgets for 1999 and





                                                                               5

<PAGE>


                          DESCRIPTION OF THE PROPERTIES


2000. This occurs because projects within a given year's budget may extend into
subsequent years, with capital expenditures attributable to those projects used
in calculating distributable income to the Trust in those subsequent years.
Further, BROG's accounting period for capital expenditures runs through November
30 of each calendar year, such that capital expenditures incurred in December of
each year are actually accounted for as part of the following year's capital
expenditures. Also, for wells not operated by BROG, BROG's share of capital
expenditures may not actually be paid by it until the year or years after those
expenses were incurred by the operator. Capital expenditures of approximately
$27 million for 2001 budgeted projects were used in calculating distributable
income in calendar year 2001, and approximately $7 million in capital
expenditures have been used in calculating distributions for the first two
months of 2002. Therefore, an additional approximately $4.8 million in capital
expenditures for 2001 projects remains to be spent.

     During 2001, in calculating the net proceeds to the Trust, BROG deducted
approximately $33 million of capital expenditures for projects, including
drilling and completion of 92 gross (36.33 net) conventional wells, recompletion
of 33 gross (18.18 net) conventional wells, 13 gross (2.85 net) miscellaneous
capital projects, 3 gross (2.34 net) restimulations, 56 gross (8.40 net)
conventional payadds, 10 gross (1.52 net) coal seam wells, 4 gross (1.61 net)
coal seam well recompletions, 1 gross (.88 net) coal seam payadd, 6 gross (.04
net) coal seam recavitations and facilities maintenance. There were 100 gross
(32.47 net) new conventional wells, 31 gross (13.47 net) conventional well
recompletions, 2 gross (.87 net) miscellaneous conventional capital projects,
9 gross (3.17 net) conventional payadds, 15 gross (1.09 net) conventional
restimulations, 12 gross (5.36 net) coal seam wells, 7 gross (4.11 net) coal
seam recompletions, 2 gross (.02 net) coal seam restimulations and 6 gross (.29
net) miscellaneous coal seam capital projects in progress as of December 31,
2001.

     During 2000, in calculating the net proceeds to the Trust, BROG deducted
approximately $25.6 million of capital expenditures for projects, including
drilling and completion of 45 gross (25.45 net) conventional wells, recompletion
of 15 gross (6.80 net) conventional wells, 12 gross (6.75 net) coal seam wells,
4 gross (.17 net) coal seam well recompletions, 41 gross (.24 net) coal seam
recavitations, and facilities maintenance. There were 124 gross (36.15 net) new
conventional wells, 59 gross (21.37 net) conventional well recompletions, 10
gross (2.14 net) coal seam wells, 12 gross (1.64 net) coal seam recompletions
and 4 gross (.03 net) coal seam recavitations in progress as of December 31,
2000.

     BROG has informed the Trust that it has reduced its projections for capital
expenditures for the Underlying Properties for 2002 from an estimated $17.1
million to an estimated $12.4 million. BROG anticipates the drilling of 43 new
wells to be operated by BROG and 26 wells to be operated by third parties. Of
the new BROG operated wells, 36 are projected to be conventional wells completed
to the Pictured Cliffs, Mesaverde, and/or Dakota formations, and the remaining
seven are projected as coal seam gas wells to be completed in the Fruitland Coal
formation. BROG projects approximately $9.6 million to be spent on the new
wells, and $2.8 million to be expended in working over existing wells and in the
maintenance and improvement of production facilities.

     BROG has previously informed the Trust that increases in its capital
program, particularly in 2000 and 2001, were designed to offset the natural
decline in production from the Underlying Properties. BROG has reported
favorable results in this effort in that natural gas production for calendar
year 2001 averaged approximately 121 MMcf per day, as compared to average
production of approximately 116 MMcf per day for calendar 2000 and 113 MMcf per
day for calendar 1999.

     BROG indicates its budget for 2002 reflects continued, significant
development of properties in which the Trust's net overriding royalty interest
is relatively high, as well as a sustained focus on conventional formations,
including infill drilling to the Mesaverde and Dakota formations, development of
the Fruitland Coal formation and multiple formation completions.

     The Federal Energy Regulatory Commission is primarily responsible for
federal regulation of natural gas. For a further discussion of gas pricing, gas
purchasers, gas production and regulatory matters affecting gas production see
Item 2, "Properties," in the accompanying Form 10-K.

6

<PAGE>


                        TRUSTEE'S DISCUSSION AND ANALYSIS

     Distributable income consists of Royalty Income plus interest, less the
general and administrative expenses of the Trust and any changes in cash
reserves established by the Trustee. For the year ended December 31, 2001,
Distributable Income increased to $80,126,202 from $59,188,932 distributed in
2000. The increase was primarily attributable to higher gas and oil prices.

     Included in the 2000 Distributable Income was a payment by BROG to the
Trust of $3,490,000. In June 2000, the Trust and BROG entered into a partial
settlement of a claim relating to a gas imbalance. A gas imbalance occurs when
more than one party is entitled to the economic benefit of the production of
natural gas, but the gas is sold for the account of less than all the parties.
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. BROG has indicated that the remainder of the imbalance is to
be addressed through volume adjustments whereby the Trust's net overriding
royalty interest will be applied to 50% of the overproduced parties' interest on
a monthly basis, until the imbalance is corrected. The Trust is in communication
with BROG in order to determine the estimated value of the volume adjustments
and the time during which the remainder of the imbalance will be corrected.

     Interest income increased from $148,513 in 2000 to $165,676 in 2001,
primarily due to increased funds available to invest.

     Total gas and oil production from the Underlying Properties for the five
years ended December 31, 2001, were as follows:

<Table>
<Caption>

                     2001         2000         1999         1998         1997
                  ----------   ----------   ----------   ----------   ----------
<S>               <C>          <C>          <C>          <C>          <C>
Gas - Mcf         42,960,149   42,220,260   39,940,175   41,507,353   41,948,567
Mcf per Day          117,699      115,356      109,425      113,719      114,928
Oil-Bbls              92,413       97,330       72,223       81,888       89,492
Bbls per Day             253          266          198          224          245
</Table>

     Since the oil and gas sales attributable to the Royalty are based on an
allocation formula dependent 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.

     Royalty Income for the calendar year is associated with actual gas and oil
production during the period from November of the preceding year through October
of the current year. Gas and oil sales attributable to the Royalty for the past
five years are summarized in the following table:

<Table>
<Caption>

                              2001           2000           1999            1998          1997
                          ------------   ------------   ------------   ------------   ------------
<S>                       <C>            <C>            <C>            <C>            <C>
Gas - Mcf                   19,272,021     20,317,750     19,527,666     18,904,906     24,236,419
Average Price (per Mcf)   $       4.61   $       2.99   $       1.78   $       1.75   $       2.21
Oil - Bbls                      42,056         47,441         35,341         37,067         50,860
Average Price (per Bbl)   $      24.99   $      24.66   $      14.41   $      13.55   $      19.35
</Table>


                                                                               7

<PAGE>


                        TRUSTEE'S DISCUSSION AND ANALYSIS

     The fluctuations in annual gas production that have occurred during these
five years generally resulted from changes in the demand for gas during that
time, marketing conditions and increased capital spending to generate production
from new wells. Production from the Underlying Properties is influenced by the
line pressure of the gas gathering systems in the San Juan Basin. As noted
above, oil and gas sales attributable to the Royalty are based on an allocation
formula dependent on many factors, including oil and gas prices and capital
expenditures.

     Royalty Income for the five years ended December 31, 2001, was determined
as shown in the following table:

<Table>
<Caption>

                              2001             2000           1999              1998            1997
                           ------------    ------------    ------------     ------------    ------------
GROSS PROCEEDS FROM
THE UNDERLYING PROPERTIES:
<S>                        <C>             <C>             <C>              <C>             <C>
Gas                        $169,052,231    $124,902,689    $ 69,928,312     $ 71,247,501    $ 91,495,060
Oil                           2,233,071       2,409,158       1,028,862        1,088,228       1,728,296
Other                               -0-       4,653,333       1,189,996              -0-             -0-
                           ------------    ------------    ------------     ------------    ------------
       Total               $171,285,302    $131,965,180    $ 72,147,170     $ 72,335,729    $ 93,223,356
                           ============    ============    ============     ============    ============

LESS PRODUCTION COSTS:
Capital Costs                32,999,973      25,575,657      10,556,159       12,828,300       7,231,696
Severance Tax - Gas          16,687,074      12,059,286       7,180,973        7,341,098       8,989,202
Severance Tax - Oil             202,113         234,462         106,335          117,454         167,844
Other                            55,000         129,161         (95,445)          66,892          61,832
Lease Operating Expenses     15,109,139      13,906,916      10,896,526       11,558,172      10,776,145
                           ------------    ------------    ------------     ------------    ------------
         Total               65,053,299      51,905,482      28,644,548       31,911,916      27,226,719
                           ------------    ------------    ------------     ------------    ------------
Excess Production Costs       2,259,628             -0-             -0-              -0-             -0-
Net Profits                 108,491,631      80,059,698      43,502,622       40,423,813      65,996,637
Royalty Percentage                   75%             75%             75%              75%             75%
Royalty Income             $ 81,368,723    $ 60,044,773    $ 32,626,966     $ 30,317,860    $ 49,497,479
                           ============    ============    ============     ============    ============
</Table>

     Under the terms of the June 2000 partial settlement of a claim relating to
the gas imbalance discussed above, BROG paid the Trust 75% of the gross proceeds
of $4,653,333 or $3,490,000, to settle the imbalance insofar as it relates to
some of the wells located on subject properties.

     Included in 1999 Distributable Income was a payment by BROG to the Trust in
March 1999 of $892,498. After a rupture of the Williams "Trunk S" Pipeline
disrupted a significant flow of gas from BROG properties, BROG filed claims with
insurance carriers and subsequently received payments of its claims. Some of the
claims filed related to properties burdened by the Royalty. The amount of
insurance proceeds applicable to such properties was determined to be
$1,189,996, of which the Trust received 75% or $892,498.

     Based on its 1999 year-end review, BROG determined that it had undercharged
the Trust for both capital expenditures and lease operating charges related to
properties burdened by the Trust but not operated by BROG. In April and May of
2000, BROG passed through to the Trust additional charges of $652,303 in capital
expenditures and $1,689,509 in lease operating charges related to the
undercharged non-operated properties. The Trust's consultants have reviewed
BROG's cost reporting data and confirmed that these additional charges were
appropriate.

     Operating expenses for 1997 through 2001 include the impact of the receipt
of $250,000 from BROG as an offset to lease operating expense in connection with
the settlement of the litigation described in Note 5 to the accompanying
Financial Statements. The final $250,000 offset was made in December 2001.
Excluding the impact of the offset, monthly operating costs in 2001 averaged
approximately $1,242,247, which is higher than the $1,186,356 average in 2000.
The increase in capital costs incurred by BROG on the Underlying Properties
commencing during the year ended December 31, 1998, was primarily attributable
to increased drilling activity. For additional information on capital
expenditures, see "Description of the Properties."

8

<PAGE>



                  RESULTS OF THE 4TH QUARTERS OF 2001 and 2000


     Distributable income for the three months ended December 31, 2001, totaled
$2,898,013 ($.062177 per Unit) as compared to $16,456,141 ($.353069 per Unit)
for the quarter ended December 31, 2000. The amount distributed in the fourth
quarter of 2001 was lower than that of 2000 primarily because of lower average
gas and oil prices and capital costs incurred in the fourth quarter of 2001. The
Trust did not receive Royalty Income for December 2001 because revenues based on
production during the month of October 2001 were less than expenses.

     Royalty Income of the Trust for the fourth quarter is associated with
actual gas and oil production during August through October of each year. Gas
and oil sales for the quarters ended December 31, 2001 and 2000 were as follows:

<Table>
<Caption>

UNDERLYING PROPERTIES                   2001         2000
---------------------                ----------   ----------
<S>                                  <C>          <C>
Gas - Mcf                            10,248,195   10,286,975
   Average Price (per Mcf)           $     1.87   $     3.81
Oil - Bbls                               21,018       24,405
   Average Price (per Bbl)           $    20.88   $    28.18


ATTRIBUTABLE TO THE ROYALTY
Gas - Mcf                             1,483,888    4,609,306
Oil - Bbls                                2,792       10,955
</Table>

     The average price of gas and oil decreased in the fourth quarter of 2001
compared to 2000. The price per barrel of oil during the fourth quarter of 2001
was $7.30 per Bbl lower than that received in the fourth quarter of 2000 due to
decreases in oil prices in world markets generally, including the posted price
applicable to the Royalty. Gas production from the Underlying Properties was
essentially stable. During the fourth quarter of 2001, coal seam production from
the Underlying Properties averaged 961,310 Mcf per month compared to 1,112,153
Mcf per month during the fourth quarter of 2000.

     Capital costs for the fourth quarter of 2001 totaled $11,528,106 compared
to $11,219,202 during the same period of 2000. The increase was primarily due to
the timing of the receipt and payment of continued drilling activity expenses in
the fourth quarter of 2001. Lease operating expenses for the fourth quarter of
2001 averaged $1,411,550 per month compared to $1,094,682 per month in the
fourth quarter of 2000.



                                      [MAP]



                                                                               9

<PAGE>

                          SAN JUAN BASIN ROYALTY TRUST

Statements of Assets, Liabilities and Trust Corpus
December 31, 2001 and 2000
--------------------------------------------------------------------------------
<Table>
<Caption>

ASSETS                                                            2001                  2000
                                                             ---------------       ---------------
<S>                                                          <C>                   <C>
Cash and Short-term Investments                              $       191,620       $     6,972,892
Net Overriding Royalty Interests in Producing
        Oil and Gas Properties - Net                              37,859,749            40,686,854
                                                             ---------------       ---------------
                                                             $    38,051,369       $    47,659,746
                                                             ===============       ===============

LIABILITIES AND TRUST CORPUS

Distribution Payable to Unit Holders                         $           -0-       $     6,972,892
Cash Reserves                                                        191,620                   -0-
Trust Corpus - 46,608,796 Units of Beneficial Interest
        Authorized and Outstanding                                37,859,749            40,686,854
                                                             ---------------       ---------------
                                                             $    38,051,369       $    47,659,746
                                                             ===============       ===============
</Table>


Statements of Distributable Income
for the Three Years Ended December 31, 2001
--------------------------------------------------------------------------------
<Table>
<Caption>

                                                          2001              2000               1999
                                                       -----------       -----------       -----------
<S>                                                    <C>               <C>               <C>
Royalty Income                                         $81,368,723       $60,044,773       $32,626,966
Interest Income                                            165,676           148,513            65,029
                                                       -----------       -----------       -----------
                                                        81,534,399        60,193,286        32,691,995
Expenditures - General and Administrative                1,216,577         1,004,354           896,328
Change in Cash Reserves                                    191,620               -0-               -0-
                                                       -----------       -----------       -----------
Distributable Income                                   $80,126,202       $59,188,932       $31,795,667
                                                       ===========       ===========       ===========
Distributable Income Per Unit (46,608,796 units)       $  1.719123       $  1.269909       $   .682182
                                                       ===========       ===========       ===========
</Table>



Statements of Changes in Trust Corpus
for the Three Years Ended December 31, 2001
--------------------------------------------------------------------------------
<Table>
<Caption>

                                                          2001                2000                 1999
                                                      ------------        ------------        ------------
<S>                                                   <C>                 <C>                 <C>
Trust Corpus, Beginning of Period                     $ 40,686,854        $ 45,186,199        $ 51,088,020
Amortization of Net Overriding Royalty Interest         (2,827,105)         (4,499,345)         (5,901,821)
Distributable Income                                    80,126,202          59,188,932          31,795,667
Distribution Declared                                  (80,126,202)        (59,188,932)        (31,795,667)
                                                      ============        ============        ============
Trust Corpus, End of Period                           $ 37,859,749        $ 40,686,854        $ 45,186,199
                                                      ============        ============        ============
</Table>


The accompanying Notes to Financial Statements are an integral part of these
statements.

10

<PAGE>

                                   [PICTURE]


<PAGE>

                                   [NEW PHOTO]


<PAGE>
           SAN JUAN BASIN ROYALTY TRUST NOTES TO FINANCIAL STATEMENTS

1. TRUST ORGANIZATION AND PROVISIONS

The San Juan Basin Royalty Trust ("Trust") was established as of November 1,
1980. Bank One, NA ("Trustee") is Trustee for the Trust. Southland Royalty
Company ("Southland") conveyed to the Trust a 75% net overriding royalty
interest ("Royalty") carved out of Southland's working interests and royalty
interests in the properties located in the San Juan Basin in northwestern New
Mexico (the "Underlying Properties").

         On November 3, 1980, units of beneficial interest ("Units") in the
Trust were distributed to the Trustee for the benefit of Southland shareholders
of record as of November 3, 1980, who received one Unit in the Trust for each
share of Southland common stock held. The Units are traded on the New York Stock
Exchange.

         The terms of the Trust Indenture provide, among other things, that:

      o  The Trust shall not engage in any business or commercial activity of
         any kind or acquire any assets other than those initially conveyed to
         the Trust;

      o  The Trustee may not sell all or any part of the Royalty unless approved
         by holders of 75% of all Units outstanding, in which case the sale must
         be for cash and the proceeds promptly distributed;

      o  The Trustee may establish a cash reserve for the payment of any
         liability which is contingent or uncertain in amount;

      o  The Trustee is authorized to borrow funds to pay liabilities of the
         Trust; and

      o  The Trustee will make monthly cash distributions to Unit holders (see
         Note 2).

2. NET OVERRIDING ROYALTY INTEREST AND DISTRIBUTION TO UNIT HOLDERS

The amounts to be distributed to Unit holders ("Monthly Distribution Amounts")
are determined on a monthly basis. The Monthly Distribution Amount is an amount
equal to the sum of cash received by the Trustee during a calendar month
attributable to the Royalty, any reduction in cash reserves and any other cash
receipts of the Trust, including interest, reduced by the sum of liabilities
paid and any increase in cash reserves. If the Monthly Distribution Amount for
any monthly period is a negative number, then the distribution will be zero for
such month and such negative amount will be carried forward and deducted from
future monthly distributions until the cumulative distribution calculation
becomes a positive number, at which time a distribution will be made. Unit
holders of record will be entitled to receive the calculated Monthly
Distribution Amount for each month on or before ten business days after the
monthly record date, which is generally the last business day of each calendar
month.

         The cash received by the Trustee consists of the amounts received by
the owner of the interest burdened by the Royalty from the sale of production
less the sum of applicable taxes, accrued production costs, development and
drilling costs, operating charges and other costs and deductions, multiplied by
75%.

         The initial carrying value of the Royalty ($133,275,528) represented
Southland's historical net book value at the date of the transfer of the Trust.
Accumulated amortization as of December 31, 2001 and 2000 aggregated $95,415,779
and $92,588,674, respectively.

3. BASIS OF ACCOUNTING

The financial statements of the Trust are prepared on the following basis:

      o  Royalty income recorded for a month is the amount computed and paid by
         the working interest owner, Burlington Resources Oil & Gas Company LP
         ("BROG"), to the Trustee for the Trust. Royalty income consists of the
         amounts received by the owner of the interest burdened by the net
         overriding royalty interest 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%.

      o  Trust expenses recorded are based on liabilities paid and cash reserves
         established from Royalty income for liabilities and contingencies.

      o  Distributions to Unit holders are recorded when declared by the
         Trustee.

      o  The conveyance which transferred the overriding royalty interests to
         the Trust provides that any excess of production costs over gross
         proceeds must be recovered from future net profits. The financial
         statements of the Trust differ from financial statements prepared in
         accordance with generally accepted accounting principles ("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; and
         amortization of the Royalty calculated on a unit-of-production basis is
         charged directly to trust corpus.

                                                                              13
<PAGE>

                          SAN JUAN BASIN ROYALTY TRUST

4. FEDERAL INCOME TAXES

For federal income tax purposes, the Trust constitutes a fixed investment trust
which 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'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.

         The Royalty constitutes an "economic interest" 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 the tax
treatment described above.

         The Trust began receiving royalty income from coal seam gas wells in
1989. Under Section 29 of the Internal Revenue Code, coal seam gas production
from wells drilled prior to January 1, 1993 (including certain wells recompleted
in coal seam formations thereafter), generally qualifies for the federal income
tax credit for producing non-conventional fuels if such production and the sale
thereof occurs before January 1, 2003. For 2001, this tax credit will be
approximately $1.08 per MMBtu. The Trust also receives production from wells
producing from a tight sands formation. These wells must have been drilled after
November 5, 1990, or must have been committed or dedicated to interstate
commerce (as defined in Section 2(18) of the Natural Gas Policy Act as in effect
November 5, 1990) as of April 20, 1977. This credit is not adjusted for
inflation, so the credit remains fixed at .517241 per MMBtu. For qualifying
production of the Trust, each Unit holder must determine from the tax
information he receives from the Trust his pro rata share of qualifying
production of the Trust, 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 apply
the tax credit against his own income tax liability; but such credit may not
reduce his regular liability (after the foreign tax credit and certain other
nonrefundable credits) below his tentative minimum tax. Section 29 also provides
that any amount of Section 29 credit disallowed for the tax year solely because
of this limitation will increase his credit for prior year minimum tax
liability, which may be carried forward indefinitely as a credit against the
taxpayer'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 29 credit in any other circumstances.

         The Trustee is provided summary Section 29 tax credit information
related to Trust properties by BROG, which information is then passed along to
the Unit holders. 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 29
credit unless the producer has received an appropriate well category
determination from the Federal Energy Regulatory Commission ("FERC"). The FERC's
certification authority expired effective January 1, 1993. However, on July 14,
2000, the FERC issued a final ruling amending its regulations to reinstate
certain regulations involving well category determinations for all wells and
tight formation areas that could qualify for the Section 29 tax credit. BROG has
informed the Trustee that it has identified approximately 250 wells as
non-certified. Of those, BROG has determined that six do not qualify for the
Section 29 tax credit. BROG has applied to the FERC for certification of the
approximately 100 qualified wells operated by it, and is in communication with
the operators of the remaining qualified wells to encourage the filing by those
operators of applications for certification. The classification of the Trust'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 will generally be
treated as portfolio income and will not reduce passive losses.

5. LITIGATION SETTLEMENT

On June 4, 1992, the Trustee filed suit (the "Litigation") against Meridian Oil,
Inc. ("MOI") and Southland in New Mexico. The principal asset of the Trust
consists of a 75% net overriding royalty interest carved out of the Underlying
Interests. MOI and Southland were the operators of the Underlying Properties. On
January 2, 1996, Southland was merged with and became a wholly owned subsidiary
of MOI. Subsequent to the merger, MOI changed its name to Burlington Resources
Oil & Gas Company LP ("BROG").

         The claims asserted on behalf of the Trust in the lawsuit included
breach of contract, breach of the covenant of good faith and fair dealing,
breach of express good faith duty, constructive fraud, unjust enrichment, prima
facie tort, intentional interference with contract and conspiracy. The relief
sought included compensatory and punitive damages, an accounting and a permanent
injunction relating to the operation of the Underlying Properties.

14

<PAGE>


                          SAN JUAN BASIN ROYALTY TRUST

         On September 4, 1996, the Trustee announced the settlement of the
Litigation. The Litigation was dismissed on September 12, 1996. BROG denied and
continues to deny the allegations made against it in the Litigation, but the
parties agreed to settle the Litigation as outlined herein.

         BROG agreed (i) to pay $19,750,000 in cash plus interest earning
thereon from September 5, 1996, in settlement of underpayment of royalty claims
of the Trust; and (ii) commencing in 1997, to credit the Trust with $250,000 per
year for five years as an offset against lease operating expenses chargeable to
the Trust. BROG also agreed to make certain adjustments that represent cost
reductions favorable to the Trust in the ongoing charges for coal seam gas
gathering and treating on BROG's Val Verde system. Additionally, the Trustee and
BROG established a formal protocol that will provide the Trustee and its
representatives improved access to BROG's books and records applicable to the
Underlying Properties.

         Agreement was also reached regarding marketing arrangements for the
sale of gas, oil and natural gas liquids products from the Underlying Properties
going forward as follows:

         1. BROG agreed that contracts for the sale of gas from the Underlying
Properties would require the written approval of an independent gas marketing
consultant acceptable to the Trust. For a discussion of the current contract
covering the sale of gas from the Underlying Properties, see Note 6.

         2. BROG will continue to market the oil and natural gas liquids from
the Underlying Properties but will remit to the Trust actual proceeds from such
sales. BROG will no longer use posted prices as the basis for calculating
proceeds to the Trust nor make a deduction for marketing fees associated with
sales of oil or natural gas liquids products.

         3. The Trust retained access to BROG's current gas transportation,
gathering, processing and treating agreements with third parties through the
remainder of their primary terms.

6. CERTAIN CONTRACTS

Effective January 1, 1998, all volumes of gas subject to the Royalty (the "Trust
gas") became subject to the terms of a Natural Gas Sales and Purchase Contract
between BROG and El Paso Energy Marketing Company ("El Paso"). That contract was
for a term of two years through and including December 31, 1999, and provided
for the sale of Trust gas at prices which fluctuated in accordance with
published indices for gas sold in the San Juan Basin of New Mexico. BROG entered
into the contract with El Paso after soliciting and receiving competitive bids
in late 1997 from six major gas marketing firms to market and/or pur chase the
Trust gas. BROG entered into a contract dated November 10, 1999, for the sale of
all volumes of Trust gas to Duke Energy and Marketing L.L.C. That contract, as
amended, provides for delivery of gas at various delivery points over a period
commencing January 1, 2000, and ending March 31, 2002, and provides for the sale
of Trust gas at prices which fluctuate in accordance with published indices for
gas sold in the San Juan Basin of New Mexico. BROG has distributed requests for
proposal to 27 potential bidders with a view toward entering into one or more
contracts for the sale of the Trust gas for the period commencing April 1, 2002,
through March 31, 2004.

         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,
gas receipt points, etc. Such disclosure could compromise the ability to compete
effectively in the marketplace for the sale of gas produced from the Under-lying
Properties.

7. GAS IMBALANCE

In June 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 is
to be addressed through volume adjustments whereby the Trust's net overriding
royalty interest will be applied to 50% of the overproduced parties' interest,
on a monthly basis, until the imbalance is corrected. The Trust is in
communication with BROG in order to determine the estimated value of the volume
adjustments and the time during which the remainder of the imbalance will be
corrected.

8. PRIOR PERIOD ADJUSTMENTS

Based on its year-end review, BROG has determined that since January of 1999,
BROG has undercharged the Trust for both capital expenditures and lease
operating charges related to properties burdened by the Trust but not operated
by BROG. In April and May of 2000, BROG passed through to the Trust additional
charges of $652,303 in capital expenditures and $1,689,509 in lease operating
charges related to the under-charged non-operated properties. The Trust's
consultants have reviewed BROG's cost reporting data and confirmed that the
pass-through of these additional charges was appropriate.

                                                                              15

<PAGE>


                          SAN JUAN BASIN ROYALTY TRUST


9. COMMITMENTS AND CONTINGENCIES

Excess production costs of $2,259,628 were incurred by BROG in December 2001,
due primarily to capital costs. Of the total, $1,694,721 is attributable to the
Trust and may be recovered from future gross proceeds by BROG from the
Underlying Properties before making any further royalty payments to the Trust.
The total was recovered by BROG in February 2002 and the Trust received a
royalty payment that month.

10. SIGNIFICANT CUSTOMERS

Information as to significant purchasers of oil and gas production attributable
to the Trust's economic interests is included in Note 6 above.

11. PROVED OIL AND GAS RESERVED (UNAUDITED)

Proved oil and gas reserve information is included in Item 2 of the Trust's
annual report on Form 10-K which is included in this report.

12. QUARTERLY SCHEDULE OF DISTRIBUTABLE INCOME (UNAUDITED)

The following is a summary of the unaudited quarterly schedule of distributable
income for the two years ended December 31, 2001 (in thousands, except unit
amounts):

<Table>
<Caption>

                                                                             Distributable
                                                                              Income and
                                          Royalty         Distributable      Distribution
                                           Income            Income            Per Unit
                                        ------------       ------------       ------------
2001
----------
<S>                                     <C>                <C>                <C>
First Quarter                           $     37,490       $     37,262       $    .799474
Second Quarter                                26,586             26,251            .563215
Third Quarter                                 13,972             13,715            .294257
Fourth Quarter                                 3,321              2,898            .062177
                                        ------------       ------------       ------------
       Total                            $     81,369       $     80,126       $   1.719123
                                        ============       ============       ============

2000
----
First Quarter                           $     10,077       $      9,889       $    .212160
Second Quarter                                13,609             13,193            .283054
Third Quarter                                 19,747             19,651            .421626
Fourth Quarter                                16,612             16,456            .353069
                                        ------------       ------------       ------------
       Total                            $     60,045       $     59,189       $   1.269909
                                        ============       ============       ============
</Table>


                          INDEPENDENT AUDITOR'S REPORT

Bank One, NA as Trustee for the San Juan Basin Royalty Trust:

         We have audited the accompanying statement of assets, liabilities and
trust corpus of the San Juan Basin Royalty Trust as of December 31, 2001, and
the related statement of distributable income and changes in trust corpus for
the year then ended. These financial statements are the responsibility of the
Trustee. Our responsibility is to express an opinion on these financial
statements based on our audit.

         We conducted our audit in accordance with U. S. generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Trustee, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

         As described in Note 3 to the financial statements, these financial
statements were prepared on a modified cash basis of accounting, which is a
comprehensive basis of accounting other than U. S. generally accepted accounting
principles.

         In our opinion, such financial statements present fairly, in all
material respects, the assets, liabilities and trust corpus of the San Juan
Basin Royalty Trust as of December 31, 2001, and the distributable income and
changes in trust corpus for the year then ended, on the basis of accounting
described in Note 3 to the financial statements.



Weaver and Tidwell, LLP
Fort Worth, Texas

March 25, 2002



16


<PAGE>

INDEPENDENT AUDITORS' REPORT


Bank One, NA as Trustee for the
   San Juan Basin Royalty Trust

We have audited the accompanying statement of assets, liabilities and trust
corpus of the San Juan Basin Royalty Trust ("Trust") as of December 31, 2000,
and the related statements of distributable income and changes in trust corpus
for each of the two years ended December 31, 2000. These financial statements
are the responsibility of the Trustee. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As described in Note 3 to the financial statements, these financial statements
were prepared on a modified cash basis, which is a comprehensive basis of
accounting other than accounting principles generally accepted in the United
States of America.

In our opinion, such financial statements present fairly, in all material
respects, the assets, liabilities and trust corpus of the San Juan Basin Royalty
Trust as of December 31, 2000, and the distributable income and changes in trust
corpus for each of the two years ended December 31, 2000, on the basis of
accounting described in Note 3.




DELOITTE & TOUCHE LLP

Fort Worth, Texas
March 23, 2001
<PAGE>

SAN JUAN BASIN ROYALTY TRUST

Bank One, NA, Trustee
Post Office Box 2604, TX1-1306
Fort Worth, Texas 76113
817-884-4630
www.sjbrt.com
sjbrt@bankone.com


AUDITORS

Weaver and Tidwell, LLP
Fort Worth, Texas


LEGAL COUNSEL

Vinson & Elkins, L.L.P.
Dallas, Texas

TAX COUNSEL

Winstead Sechrest & Minick, P.C.
Houston, Texas

TRANSFER AGENT

Computershare Investor Services
Transfer Services
P.O. Box A3480
Chicago, Illinois 60690-3480

For questions about distribution
checks, address changes and transfer
procedures, call 312-360-5154.