**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

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FORM 10-Q

**x**                              QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**Forthe Quarterly Period Ended March 31, 2005**

**or**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

**CommissionFile Number 1-11450**

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SANTA FE ENERGY TRUST

(Exact name of registrantas specified in its charter)
| **Texas**                                                        | **76-6081498**                        |
|------------------------------------------------------------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) | (I.R.S. Employer  Identification No.) |

 

**JPMorgan Chase Bank, N.A.,TrusteeInstitutional Trust Services700 LavacaAustin, Texas 78701**

(Address of principaloffices, including Zip Code)

Registrant’s telephonenumber, including area code**(512) 479-2562**

**NONE**

(Former name or formeraddress, if changed since last report)

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filing requirementsfor the past 90 days.

Yes x No o

Indicate by check markwhether the registrant is an accelerated filer (as defined in Rule 12b-2of the Exchange Act).

Yes x No o

Depository Units outstanding at March 31,2005—6,300,000

 

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**PART I—FINANCIAL INFORMATION**

**Item 1**.                        *Financial Statements.*

**SANTA FE ENERGY TRUSTSTATEMENTS OF CASH PROCEEDSAND DISTRIBUTABLE CASH (Unaudited)(In thousands, except per unit data)**
| ** **                                      | ** ** | **Three Months Ended  March 31,** | ** ** |
|-------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                      | ** ** | **2005**                                         | ** ** | **2004** | ** ** |
| Royalty income                                  |       |                                             |       |   |   |
| ODC royalty                                     |       | $                                                | 2,972      |   | $ | 1,918 |   |
| Willard royalty                                 |       | —                                           |       | 332 |   |
| Net profits royalty                             |       | 3,046                                            |       | 2,444 |   |
| Total royalties                                 |       | 6,018                                            |       | 4,694 |   |
| Administrative  fee to Devon Energy Corporation |       | (74                                              | )          | (72 | ) |
| Cash withheld for  trust expenses               |       | (100                                             | )          | (100 | ) |
| Distributable cash                              |       | $                                                | 5,844      |   | $ | 4,522 |   |
| Distributable cash per trust unit               |       | $                                                | 0.92772    |   | $ | 0.71784 |   |
| Trust units  outstanding                        |       | 6,300                                            |       | 6,300 |   |

 

**STATEMENTSOF ASSETS, LIABILITIES AND TRUST CORPUS**(In thousands, except unit data)
| ** **                                                  | ** ** | **March 31,  2005** | ** ** | **December 31,  2004** | ** ** |
|-------------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| ** **                                                  | ** ** | **(Unaudited)**          | ** ** | ** **                  | ** ** |
| ASSETS                                                      |       |                     |       |                        |       |   |   |   |   |
| Current  assets—cash                                   |       |                     | $          | 7                           |       |   |   | $ | 105 |   |   |
| Investment in royalty interests, at cost                    |       |                     | 87,276     |                        |       |   | 87,276 |   |   |
| Less: accumulated  amortization                             |       |                     | (80,639    | )                           |       |   | (80,085 | ) |   |
|                                                        |       |                     | 6,637      |                        |       |   | 7,191 |   |   |
| Total assets                                                |       |                     | $          | 6,644                       |       |   |   | $ | 7,296 |   |   |
| LIABILITIES AND TRUST CORPUS                                |       |                     |       |                        |       |   |   |   |   |
| Trust corpus,  6,300,000 trust units issued and outstanding |       |                     | 6,644      |                        |       |   | 7,296 |   |   |
| Total liabilities  and trust corpus                         |       |                     | $          | 6,644                       |       |   |   | $ | 7,296 |   |   |

 

The accompanying notes are an integral part of the financial statements.

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**SANTA FE ENERGY TRUSTSTATEMENTS OF CHANGES INTRUST CORPUS (Unaudited)Three Months Ended March 31, 2005 and 2004(In thousands)**
| Balance at  December 31, 2003 |   | $      | 10,029 |   |
|------------------------------------|--------|--------|--------|--------|
| Cash proceeds                      |   | 4,622  |   |
| Cash distributions                 |   | (4,522 | )      |
| Trust expenses                     |   | (162   | )      |
| Amortization of royalty interests  |   | (664   | )      |
| Balance at March 31, 2004     |   | $      | 9,303  |   |
| Balance at December 31, 2004  |   | $      | 7,296  |   |
| Cash proceeds                      |   | 5,944  |   |
| Cash distributions                 |   | (5,844 | )      |
| Trust expenses                     |   | (198   | )      |
| Amortization of royalty interests  |   | (554   | )      |
| Balance at March 31, 2005     |   | $      | 6,644  |   |

 

The accompanying notes are an integral part of the financial statements.

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**SANTA FE ENERGY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited)**

**Note 1. The Trust**

The financial statements at March 31, 2005 andfor the three-month periods ended March 31, 2005 and 2004 areunaudited and reflect all adjustments (consisting of only normal and recurringadjustments) that are, in the opinion of Devon Energy Corporation, necessaryfor a fair presentation of the financial position and cash proceeds anddistributable cash of the Santa Fe Energy Trust for the interim periods.

Santa Fe Energy Trust (the “Trust”) was formed on October 22,1992, with JPMorgan Chase Bank, N.A., formerly The Chase Manhattan Bank,successor by merger to Chase Bank of Texas, National Association formerly TexasCommerce Bank, National Association, as trustee (the “Trustee”), to acquire andhold certain royalty interests (the “Royalty Interests”) in certain properties(the “Royalty Properties”) conveyed to the Trust by Devon Energy ProductionCompany, L.P. (“Devon”), successor by merger to Devon SFS Operating, Inc.,formerly Santa Fe Snyder Corporation, formerly Santa Fe Energy Resources, Inc.Through December 31, 2003, the Royalty Interests consisted of two termroyalty interests in two production units in the Wasson field in west Texas(the “Wasson Royalties”) and a net profits royalty interest in certain royaltyand working interests in a diversified portfolio of properties located in 11states (the “Net Profits Royalties”). On December 31, 2003, the term onthe royalty interest in one of the Wasson production units terminated. Firstquarter 2004 production, sales and operating expenses for the Wasson WillardUnit are related to calendar year 2003. These are the last production, salesand operating expenses the Trust will report since the Trust’s conveyedownership in the Wasson Willard Unit terminated on December 31, 2003. TheRoyalty Interests are passive in nature and the Trustee has no control over orresponsibility relating to the operation of the Royalty Properties. The Trustwill be liquidated on February 15, 2008 (the “Liquidation Date”).

In November 1992, 5,725,000 Depository Units,each consisting of beneficial ownership of one unit of undivided beneficialinterest in the Trust (“Trust Units”) and a $20 face amount beneficialownership interest in a $1,000 face amount zero coupon United States Treasuryobligation maturing on or about February 15, 2008, were sold in a publicoffering for $20 per Depository Unit. A total of $114.5 million wasreceived from public investors, of which $38.7 million was used to purchase theTreasury obligations and $5.7 million was used to pay underwritingcommissions and discounts. Devon received the remaining $70.1 million and575,000 Depository Units. In the first quarter of 1994, Devon sold, in a publicoffering, the 575,000 Depository Units which it held.

The trust agreementunder which the Trust was formed (the “Trust Agreement”) provides, among otherthings, that:

·       theTrustee shall not engage in any business or commercial activity or acquire anyasset other than the Royalty Interests initially conveyed to the Trust;

·       theTrustee may not sell all or any portion of the Wasson Royalties orsubstantially all of the Net Profits Royalties without the prior consent ofDevon;

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**SANTA FE ENERGY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)**

·       Devonmay sell the Royalty Properties, subject to and burdened by the RoyaltyInterests, without consent of the holders of the Trust Units; following anysuch transfer, the Royalty Properties will continue to be burdened by theRoyalty Interests and after any such transfer the royalty payment attributableto the transferred property will be calculated separately and paid by the transferee;

·       theTrustee may establish a cash reserve for the payment of any liability that iscontingent, uncertain in amount or that is not currently due and payable;

·       theTrustee is authorized to borrow funds required to pay liabilities of the Trust,provided that such borrowings are repaid in full prior to further distributionsto the holders of the Trust Units; and

·       theTrustee will make quarterly cash distributions to the holders of the TrustUnits.

**Note 2. Basis of Accounting**

The financial statements of the Trust are prepared onthe cash basis of accounting for revenues and expenses. Royalty income isrecorded when received (generally during the quarter following the end of thequarter in which the income from the Royalty Properties is received by Devon)and is net of any cash basis exploration and development expenditures andamounts reserved for any future exploration and development costs. Expenses ofthe Trust, which include accounting, engineering, legal and other professionalfees, Trustee fees, an administrative fee paid to Devon and out-of-pocketexpenses, are recognized when paid. Under accounting principles generallyaccepted in the United States of America, revenues and expenses would berecognized on an accrual basis. Amortization of the Trust’s investment inRoyalty Interests is recorded using the unit-of-production method in the periodin which the cash is received with respect to such production; therefore, astatement of cash flows is not presented.

The conveyance of the Royalty Interests to the Trustwas accounted for as a purchase transaction. The $87,276,000 reflected in theStatements of Assets, Liabilities and Trust Corpus as Investment in RoyaltyInterests represents 6,300,000 Trust Units valued at $20 per unit less the$38,724,000 paid for the Treasury obligations. The carrying value of the Trust’sinvestment in the Royalty Interests is not necessarily indicative of the fairvalue of such Royalty Interests.

The Trust is a grantor trust and as such is notsubject to income taxes and accordingly no recognition has been given to incometaxes in the Trust’s financial statements. The tax consequences of owning TrustUnits are included in the income tax returns of the individual Trust Unitholders.

The preparation of theTrust’s financial statements requires the use of certain estimates. Actualresults may differ from such estimates.

**Note 3. The Royalty Interests**

The Wasson Royalties consist of interests conveyed outof Devon’s royalty interest in the Wasson ODC Unit (the “ODC Royalty”) and theWasson Willard Unit (the “Willard Royalty”). On December 31, 

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**SANTA FE ENERGY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)**

2003, the term on theroyalty interest in the Wasson Willard Unit terminated. The first quarter of2004 was the last quarter in which production from the Wasson Willard Unit wasreceived. The ODC Royalty entitles the Trust to receive quarterly royaltypayments with respect to 12.3934% of the actual gross oil production from theWasson ODC Unit, subject to certain quarterly limitations set forth in theconveyance agreement, for the period from November 1, 1992 to December 31,2007. The Willard Royalty entitled the Trust to receive quarterly royaltypayments with respect to 6.8355% of the actual gross oil production from theWasson Willard Unit, subject to certain quarterly limitations set forth in theconveyance agreement, for the period from November 1, 1992 to December 31,2003.

The Net Profits Royaltiesentitle the Trust to receive, on a quarterly basis, 90% of the net proceeds, asdefined in the conveyance agreement, from the sale of production from theproperties subject to the conveyance agreement. The Net Profits Royalties arenot limited in term, although the Trustee is required to sell such royaltiesprior to the Liquidation Date.

**Note 4.Distribution to Trust Unit Holders**

TheTrust has received royalty payments net of administrative fees paid to Devonand made distributions as follows:
| ** **     | ** ** | **Royalty**                                                       | ** ** | ** **        | ** ** | ** **                   | ** ** |
|----------------|------------|-------------------------------------------------------------------|------------|-------------------|------------|------------------------------|------------|
| ** **     | ** ** | **Payment**                                                       | ** ** | **Distributions** | ** ** |
| ** **     | ** ** | **Received**                                                      | ** ** | **Amount**        | ** ** | **Per Trust Unit** | ** ** |
| ** **     | ** ** | **(in thousands, except per unit data)** | ** ** |
| 2004           |       |                                                              |       |              |       |                         |       |   |   |
| First quarter  |       | $                                                                 | 4,622      |              | $          | 4,522                        |       |   | $ | 0.71784 |   |   |
| Second quarter |       | 4,427                                                             |       | 4,327             |       |                         | 0.68670    |   |   |
| Third quarter  |       | 5,067                                                             |       | 4,842             |       |                         | 0.76869    |   |   |
| Fourth quarter |       | 5,954                                                             |       | 5,904             |       |                         | 0.93712    |   |   |
|           |       | $                                                                 | 20,070     |              | $          | 19,595                       |       |   | 3.11035 |   |   |
| 2005           |       |                                                              |       |              |       |                         |       |   |   |
| First quarter  |       | $                                                                 | 5,944      |              | $          | 5,844                        |       |   | $ | 0.92772 |   |   |

 

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**Item 2. *Management’s Discussion and Analysis of FinancialCondition and Results of Operations***

**General;Liquidity and Capital Resources**

The Trust was formed on October 22, 1992. TheTrust holds Royalty Interests in Royalty Properties (“Royalty Properties”) conveyedto the Trust by Devon. The Trust is a passive entity that collects royaltyincome generated by the Royalty Properties. Through December 31, 2003, theRoyalty Interests consisted of two term royalty interests in two productionunits (the “Wasson ODC Unit” and the “Wasson Willard Unit”) in the Wasson fieldin West Texas, and a net profits royalty interest (the “Net Profits Royalties”)in certain royalty and working interests in a diversified portfolio ofproperties located predominantly in Texas, Louisiana and Oklahoma (the “NetProfits Properties”). On December 31, 2003, the term on the royaltyinterest in the Wasson Willard Unit terminated. The Royalty Interests arepassive in nature and the Trustee has no control over or responsibilityrelating to the operation of the Royalty Properties. Under the terms of theTrust Agreement, the Trustee cannot engage in any other business or commercialactivity or acquire any asset other than the Royalty Interests initiallyconveyed to the Trust. Therefore, the Royalty Interests are the sole source offunds for the Trust from which to pay expenses and liabilities and makedistributions to the Holders. The Trust will be liquidated on or before February 15,2008 (the “Liquidation Date”).

The royalty interest in the Wasson ODC Unit (the “WassonODC Royalty”) is a fixed percentage royalty interest in specified levels ofquarterly maximum production from the underlying properties in each year duringthe term of the royalty. The Wasson ODC Royalty terminates on December 31,2007. The Net Profits Royalties are life-of-property interests that will besold by the Trust prior to the Liquidation Date. The Net Profits Royaltiesentitle the Trust to receive 90% of the net proceeds (after deducting, amongother things, the costs of production and marketing and capital expenditures)from the sale of production from the Net Profits Properties. The Net ProfitsProperties generally are mature producing oil and gas properties and theproduction and reserves attributable to such properties are expected to declinesubstantially over the life of the Trust. The Net Profits Royalties areexpected to have a relatively small liquidation value at the Liquidation Date.

Trust expenses includeaccounting, engineering, legal and other professional fees, Trustee fees, anadministrative fee paid to Devon and other out-of-pocket expenses. The Trust’sability to pay expenses primarily depends on receipt of royalty income. Devonmay, at its sole discretion and without obligation to do so, advance funds tothe Trust to enable the Trust to pay expenses. The Trustee is authorized toborrow funds required to pay liabilities of the Trust, provided that any suchborrowings are repaid in full prior to making further distributions to Holders.As of March 31, 2005, Devon has no outstanding advances to the Trust.

**Results of Operations**

The Trust’s results of operations are dependent uponthe sales prices and quantities of oil and gas produced from the RoyaltyProperties, the costs of producing such resources and the amount of capitalexpenditures made with respect to such properties.

Since, on an equivalent basis, the majority of theTrust’s proved reserves are crude oil, even relatively modest changes in crudeoil prices may significantly affect the Trust’s revenues and results ofoperations. 

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Crude oil prices aresubject to significant changes in response to fluctuations in the domestic andworld supply and demand and other market conditions as well as the worldpolitical situation as it affects OPEC and other oil producing countries. Inaddition, a substantial portion of the Trust’s revenues come from propertieswhich produce sour (i.e., high sulfur content) crude oil which sells at priceslower than sweeter (i.e., low sulfur content) crude oils. The Trust’s weightedaverage crude oil sales price for the first quarter of 2005 was $41.45 perbarrel compared with $27.58 per barrel for the same period in 2004. Crude oilprices with respect to the Trust’s results in the second quarter of 2005averaged $42.41 per barrel.

Natural gas prices fluctuate due to weatherconditions, the level of natural gas in storage, the relative balance betweensupply and demand and other economic factors. The Trust’s weighted averageprice for natural gas in the first quarter of 2005 was $5.10 per Mcf comparedwith $4.44 per Mcf in the first quarter of 2004. Natural gas prices withrespect to the Trust’s results in the second quarter of 2005 averaged $5.83 perMcf.

Royalty income is recordedby the Trust when received, generally during the quarter following the end ofthe quarter in which revenues are received and costs and expenses are paid byDevon. Cash proceeds from the Royalty Properties may fluctuate from quarter toquarter due to the timing of receipts and payment of revenues and costs and expensesas well as changes in prices and production volumes. The following tablereflects pertinent information with respect to the cash proceeds from theRoyalty Properties and the net distributable cash of the Trust. The informationpresented with respect to the second quarter of 2005 reflects revenues receivedand costs and expenses paid by Devon in the first quarter of 2005. On May 31,2005, the Trust will make a cash distribution of $5.7 million, or $0.90372per Trust Unit, to unitholders of record on May 13, 2005.

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| ** **                                                                       | ** **   | **Three Months Ended  March 31,** | ** **   | **Second  Quarter** | ** **   |
|----------------------------------------------------------------------------------|--------------|--------------------------------------------------|--------------|---------------------|--------------|
| ** **                                                                       | ** **   | **2005**                                         | ** **   | **2004**            | ** **   | **2005** | ** ** |
| ***Volumes  and Prices***                                                        | *** *** | *** ***                                     | *** *** | *** ***        | *** *** | *** *** | *** *** |
| Oil volumes  (Bbls):                                                             |         |                                             |         |                |         |   |   |
| Wasson ODC royalty                                                               |         | 74,900                                           |         | 72,100              |         | 66,400 |   |
| Wasson Willard royalty(1)                                                        |         | —                                           |         | 12,000              |         | — |   |
| Net profits royalties                                                            |         | 47,075                                           |         | 49,824              |         | 42,110 |   |
| Gas volumes  (Mcf):                                                              |         |                                             |         |                |         |   |   |
| Net profits royalties                                                            |         | 408,521                                          |         | 339,304             |         | 353,718 |   |
| Oil average  prices ($/Bbl):                                                     |         |                                             |         |                |         |   |   |
| Wasson ODC royalty                                                               |         | $                                                | 42.61        |                | $            | 28.50 |   | $ | 44.65 |   |
| Wasson Willard royalty(1)                                                        |         | —                                           |         | 28.50               |         | — |   |
| Net profits royalty                                                              |         | 39.62                                            |         | 26.04               |         | 38.88 |   |
| Gas average  prices ($/Mcf):                                                     |         |                                             |         |                |         |   |   |
| Net profits royalties                                                            |         | $                                                | 5.10         |                | $            | 4.44 |   | $ | 5.83 |   |
| ***Cash  Proceeds and Distributable Cash (in thousands, except per unit data)*** | *** *** | *** ***                                     | *** *** | *** ***        | *** *** | *** *** | *** *** |
| Wasson ODC  royalty:                                                             |         |                                             |         |                |         |   |   |
| Sales                                                                            |         | $                                                | 3,191        |                | $            | 2,055 |   | $ | 2,965 |   |
| Operating expenses                                                               |         | (219                                             | )            | (137                | )            | (142 | ) |
|                                                                             |         | 2,972                                            |         | 1,918               |         | 2,823 |   |
| Wasson Willard  royalty(1):                                                      |         |                                             |         |                |         |   |   |
| Sales                                                                            |         | —                                           |         | 342                 |         | — |   |
| Operating expenses                                                               |         | —                                           |         | (10                 | )            | — |   |
|                                                                             |         | —                                           |         | 332                 |         | — |   |
| Net profits  royalty:                                                            |         |                                             |         |                |         |   |   |
| Sales                                                                            |         | 3,950                                            |         | 2,803               |         | 3,698 |   |
| Operating expenses                                                               |         | (898                                             | )            | (551                | )            | (688 | ) |
| Capital (expenditures) recoveries                                                |         | (6                                               | )            | 192                 |         | (12 | ) |
|                                                                             |         | 3,046                                            |         | 2,444               |         | 2,998 |   |
| Total royalties                                                                  |         | 6,018                                            |         | 4,694               |         | 5,821 |   |
| Administrative fee to Devon                                                      |         | (74                                              | )            | (72                 | )            | (77 | ) |
| Payment received                                                                 |         | 5,944                                            |         | 4,622               |         | 5,744 |   |
| Cash withheld for trust expenses                                                 |         | (100                                             | )            | (100                | )            | (50 | ) |
| Distributable cash                                                               |         | $                                                | 5,844        |                | $            | 4,522 |   | $ | 5,694 |   |
| Distributable  cash per unit                                                     |         | $                                                | 0.92772      |                | $            | 0.71784 |   | $ | 0.90372 |   |

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(1)          First quarter 2004production, sales and operating expenses for the Wasson Willard Unit arerelated to calendar year 2003. These are the last production, sales andoperating expenses the Trust will report since the Trust’s conveyed ownershipin the Wasson Willard Unit terminated on December 31, 2003.

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Sales increased $1.9 million from the firstquarter of 2004 to the first quarter of 2005. Sales increased $2.0 milliondue to a $13.87 per barrel increase in the average price of oil from $27.58 perbarrel in the 2004 quarter to $41.45 per barrel in the 2005 quarter and due toa $0.66 per Mcf increase in the average gas price from $4.44 per Mcf in thefirst quarter of 2004 to $5.10 in the first quarter of 2005. Production on abarrels of oil equivalent (“Boe”) basis from the first quarter of 2004 to thefirst quarter of 2005 was essentially flat, causing sales to decrease $0.1million.

Sales decreased $0.5 million from the first quarter of2005 to the second quarter of 2005. A production decrease of approximately23,000 Boe in the second quarter of 2005, as compared to the first quarter of2005, caused sales to decrease by $0.9 million. The decrease in production wasdue to timing of receipts, natural production declines and an 8,500 barrelreduction in the Wasson ODC royalty due to certain quarterly limitations setforth in the conveyance agreement. This was partially offset by an increase insales of $0.4 million due to a $0.73 per Mcf increase in the average gas pricefrom $5.10 per Mcf in the first quarter of 2005 to $5.83 per Mcf in the secondquarter of 2005 as well as a $0.96 per barrel increase in the average price ofoil from $41.45 per barrel in the first quarter of 2005 to $42.41 per barrel inthe second quarter of 2005.

Operating expenses increased $0.4 million from thefirst quarter of 2004 to the first quarter of 2005 primarily related to increasedad valorem taxes and well workover activity. Operating expenses decreased $0.3million from the first quarter of 2005 to the second quarter of 2005 primarilydue to timing of ad valorem taxes. Operating expenses may fluctuate fromquarter to quarter due to the timing of payments.

Proceeds from the NetProfits Royalties are net of capital expenditures with respect to thedevelopment of the Net Profits Properties. Capital expenditures were $6,000 forthe first quarter of 2005 compared to capital recoveries of $192,000 in thefirst quarter of 2004. Capital expenditures were $12,000 for the second quarterof 2005.

**Forward Looking Statements**

Management’s Discussion and Analysis of FinancialCondition and Results of Operations includes certain statements (other thanstatements of historical fact) that constitute forward-looking statementswithin the meaning of Section 27A of the Securities Act of 1933 and Section 21Eof the Securities Exchange Act of 1934. When used herein, the words “anticipates,”“expects,” “believes,” “intends” or “projects” and similar expressions areintended to identify forward-looking statements. It is important to notethat actual results could differ materially from those projected by suchforward-looking statements. Although it is believed that the expectationsreflected in such forward-looking statements are reasonable and suchforward-looking statements are based upon the best data available at thetime this report is filed with the Securities and Exchange Commission, noassurance can be given that such expectations will prove correct. Factors thatcould cause results to differ materially from the results discussed in suchforward-looking statements include: production variances from expectations,volatility of oil and gas prices, the need to develop and replace reserves,capital expenditures required to fund operations, environmental risks,uncertainties about estimates of reserves, competition and governmentregulation and political risks. All such forward-looking statements in thisdocument are expressly qualified in their entirety by the cautionary statementsin this paragraph.

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**Item 3.*Quantitative and Qualitative Disclosures About Market Risk***

**Disclosures About Market Risk**

Not applicable.

**Item 4.*Controls and Procedures***

**Evaluationof Disclosure Controls and Procedures**

The Trustee maintains disclosure controls andprocedures designed to ensure that information required to be disclosed by theTrust in the reports that it files or submits under the Exchange Act of 1934,as amended, is recorded, processed, summarized and reported within the timeperiods specified in the SEC’s rules and regulations. Disclosure controlsand procedures include controls and procedures designed to ensure thatinformation required to be disclosed by the Trust is accumulated andcommunicated by Devon to JPMorgan Chase Bank, N.A., as Trustee of the Trust,and its employees who participate in the preparation of the Trust’s periodicreports as appropriate to allow timely decisions regarding required disclosure.

Within 90 days of the date of this report, the Trusteecarried out an evaluation of the Trustee’s disclosure controls and procedures.Mike Ulrich, as Trust Officer of the Trustee, has concluded that the controlsand procedures are generally effective, subject to the limitations ondisclosure controls and procedures as set forth below.

Due to thecontractual arrangements of (i) the Trust Agreement and (ii) Devon’sconveyances of the Royalty Interests to the Trust regarding informationfurnished by the working interest owners, there are certain weaknesses that arenot subject to change or modification by the Trustee or its employees. Devonoperates only a small number of the Royalty Properties and is not expected tobe able to significantly influence the operations or future development of theRoyalty Properties that are royalty interests or that consist of relativelysmall working interests. Such operations will generally be controlled bypersons unaffiliated with the Trustee and Devon. Devon, however, owns workinginterests in the Wasson ODC Unit and may be able to exercise some influence,though not control, over unit operations. The contractual limitations creatingpotential weaknesses in disclosure controls and procedures may be deemed toinclude:

·       Theworking interest owners alone control (i) historical operating data,including production volumes, marketing of products, operating and capitalexpenditures, environmental and other liabilities, the effects of regulatorychanges and the number of producing wells and acreage, (ii) plans forfuture operating and capital expenditures, (iii) geological data relatingto reserves and (iv) projected production. Neither the Trustee nor Devon(to the extent Devon is not also the working interest owner) controls this information,and they rely entirely on the working interest owners to provide accurate andtimely information when requested for use in the Trust’s reports.

·       TheTrustee relies on information provided by Devon that is collected by Devon fromworking interest owners. While the Trustee may request information throughDevon, only Devon has authority to request and receive financial informationregarding the Royalty Properties from the working interest owners. The Trusteegenerally does not have any direct contact with working interest owners, otherthan Devon, and relies on Devon to request and obtain information for use inthe Trust’s reports.

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·       Underthe terms of the Trust Agreement, the Trustee is entitled to, and in fact doesrely, upon certain experts in good faith, including the independent reserveengineer with respect to the annual reserve report. The conveyances alsorestrict access to and the review of confidential data provided by Devon andworking interest owners. While the Trustee has no reason to believe itsreliance upon experts is unreasonable, this reliance on experts and restrictedaccess to information may be viewed as a weakness.

The Trustee does not intend to expand itsresponsibilities beyond those permitted or required by the Trust Agreement.

**Changes in Internal Controls.  **Tothe knowledge of the Trustee, there have not been any changes in the Trust’sinternal control over financial reporting during the fiscal quarter ended March 31,2005 that have materially affected, or are reasonably likely to materiallyaffect, the Trust’s internal control over financial reporting. The Trusteenotes for purposes of clarification that it has no authority over, and makes nostatement concerning, the internal controls of Devon and the working interestowners.

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**PART II**

**OTHER INFORMATION**

**Items1, 2, 3, 4 & 5 of Part II are not applicable and have beenomitted.**

**Item 6.*Exhibits***

(a)   Exhibits
|                | ** ** | ** **                                                                                                                                              | ** ** | **SEC File or  Registration Number** | ** ** | **Exhibit  Number** | ** ** |
|----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------|------------|---------------------|------------|
| 3(a)*          |       | Form of Trust  Agreement of Santa Fe Energy Trust                                                                                                  |       |                                 | 33-51760   |                |       |   | 3.1 |   |   |
| 4(a)*          |       | Form of Custodial  Deposit Agreement                                                                                                               |       |                                 | 33-51760   |                |       |   | 4.2 |   |   |
| 4(b)*          |       | Form of Secure  Principal Energy Receipt (included as Exhibit A to Exhibit 4(a))                                                         |       |                                 | 33-51760   |                |       |   | 4.1 |   |   |
| 10(a)*         |       | Form of Net Profits  Conveyance (Multi-State)                                                                                                      |       |                                 | 33-51760   |                |       |   | 10.1 |   |   |
| 10(b)*         |       | Form of Wasson  Conveyance                                                                                                                         |       |                                 | 33-51760   |                |       |   | 10.2 |   |   |
| 10(c)*         |       | Form of Louisiana  Mortgage                                                                                                                        |       |                                 | 33-51760   |                |       |   | 10.3 |   |   |
| 31   |       | Certification  required by Rule 13a-14(a) or  Rule 15d-14(a) under the Securities Exchange Act of 1934.                             |       |                                 |       |                |       |   |   |   |   |
| 32   |       | Certification  required by Rule 13a-14(b) or  Rule 15d-14(b) under the Securities Exchange Act of 1934 and  18 U.S.C. Section 1350. |       |                                 |       |                |       |   |   |   |   |

 

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**SIGNATURE**

Pursuantto the requirements of the Securities Exchange Act 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized, on the 9th day of May, 2005.
|            | SANTA FE ENERGY  TRUST | ** **                               |
|------------|------------------------|------------------------------------------|
|       | **(Registrant)**       |                                     |
| ** ** | By                     | JPMORGAN CHASE BANK,  N.A., TRUSTEE      |
|       | By                     | /s/  MIKE ULRICH                         |
| * *   |                   | Mike Ulrich                              |
| * *   |                   | *Vice  President and Trust Officer* |
|            |                        |                                          |  |

 

Date: May 9, 2005

The Registrant, Santa Fe Energy Trust, has noprincipal or chief executive officer, principal or chief financial officer,controller or principal accounting officer, board of directors or personsperforming similar functions. Accordingly, no additional signatures areavailable and none have been provided.

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