<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   Form 10-Q



                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934



               For the Quarterly Period Ended September 30, 1996


                           Commission File No. 1-8032



                          SAN JUAN BASIN ROYALTY TRUST


Texas                                                      I.R.S. No. 75-6279898

                     Bank One, Texas, NA, Trust Department
                                 P. O. Box 2604
                            Fort Worth, Texas 76113

                         Telephone Number 817/884-4630



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.  Yes X  No
                      ---    ---   

Number of units of beneficial interest outstanding at November 14, 1996:
46,608,796
----------
<PAGE>
 
                          SAN JUAN BASIN ROYALTY TRUST

                         PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements.

The condensed financial statements included herein have been prepared by Bank
One, Texas, NA as Trustee for the San Juan Basin Royalty Trust, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in annual
financial statements have been condensed or omitted pursuant to such rules and
regulations, although the Trustee believes that the disclosures are adequate to
make the information presented not misleading.  It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Trust's latest annual report on
Form 10-K.  In the opinion of the Trustee, all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the assets,
liabilities and trust corpus of the San Juan Basin Royalty Trust at September
30, 1996, and the distributable income and changes in trust corpus for the
three-month and nine-month periods ended September 30, 1996 and 1995 have been
included.  The distributable income for such interim periods is not necessarily
indicative of the distributable income for the full year.

Deloitte & Touche LLP, independent certified public accountants, has made a
limited review of the condensed financial statements as of September 30, 1996
and for the three-month and nine-month periods ended September 30, 1996 and 1995
included herein.

                                      -2-
<PAGE>
 
INDEPENDENT ACCOUNTANTS' REPORT



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

We have made a review of the condensed statement of assets, liabilities and
trust corpus of the San Juan Basin Royalty Trust as of September 30, 1996 and
the related condensed statements of distributable income and changes in trust
corpus for the three-month and nine-month periods ended September 30, 1996 and
1995.  These financial statements are the responsibility of the Trustee.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole.  Accordingly, we do not express such an opinion.

The accompanying condensed financial statements are prepared on a modified cash
basis as described in Note 1, which is a comprehensive basis of accounting other
than generally accepted accounting principles.

Based on our reviews, we are not aware of any material modifications that should
be made to such condensed financial statements for them to be in conformity with
the basis of accounting described in Note 1.

We have previously audited, in accordance with generally accepted auditing
standards, the statement of assets, liabilities and trust corpus of the San Juan
Basin Royalty Trust as of December 31, 1995, and the related statements of
distributable income and changes in trust corpus for the year then ended (not
presented herein); and in our report dated April 11, 1996, we expressed an
unqualified opinion on those financial statements.  In our opinion, the
information set forth in the accompanying condensed statement of assets,
liabilities and trust corpus as of December 31, 1995 is fairly stated in all
material respects, in relation to the statement of assets, liabilities and trust
corpus from which it has been derived.

DELOITTE & TOUCHE LLP

November 1, 1996

                                      -3-
<PAGE>
 
SAN JUAN  BASIN ROYALTY TRUST

CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
-------------------------------------------------------------------------------

<TABLE> 
<CAPTION> 
                                                             September 30,       December 31,
                                                                 1996                1995
                                                              (Unaudited)
<S>                                                          <C>                 <C>
ASSETS
Cash and short-term investments                               $21,157,781         $   421,446
Net overriding royalty interests in producing oil and
  gas properties (net of accumulated amortization of
  $68,159,170 and $63,141,992 at September 30, 1996
  and December 31, 1995, respectively)                         65,116,358          70,133,536
                                                              -----------         -----------

                                                              $86,274,139         $70,554,982
                                                              ===========         ===========

LIABILITIES AND TRUST CORPUS

Distribution payable to Unit holders (Note 3)                 $21,157,781         $   421,446
Commitments and contingencies (Note 3)
Trust corpus - 46,608,796 Units of beneficial
   interest authorized, issued and outstanding                 65,116,358          70,133,536
                                                              -----------         -----------

                                                              $86,274,139         $70,554,982
                                                              ===========         ===========
</TABLE> 

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)
-------------------------------------------------------------------------------

<TABLE> 
<CAPTION> 
                                        Three Months Ended                  Nine Months Ended
                                           September 30,                       September 30,
                                    ----------------------------        ----------------------------
                                        1996             1995               1996             1995
<S>                                 <C>              <C>                <C>              <C>
Royalty income (Note 3)             $24,135,208      $ 3,542,265        $32,890,337      $13,476,447
Interest income                           4,093            9,400             17,925           28,432
                                    -----------      -----------        -----------      -----------
                                     24,139,301        3,551,665         32,908,262       13,504,879

General and administrative
   costs                              1,348,584          219,876          3,248,171          896,817
                                    -----------      -----------        -----------      -----------

Distributable income                $22,790,717      $ 3,331,789        $29,660,091      $12,608,062
                                    ===========      ===========        ===========      ===========

Distributable income per Unit
   (46,608,796 Units)               $   .488979      $   .071482        $   .636361      $   .270507
                                    ===========      ===========        ===========      ===========
</TABLE> 

The accompanying notes to condensed financial statements are an integral part of
these statements.

                                      -4-
<PAGE>
 
SAN JUAN BASIN ROYALTY TRUST

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)
-------------------------------------------------------------------------------

<TABLE> 
<CAPTION> 
                                        Three Months Ended                  Nine Months Ended
                                           September 30,                       September 30,
                                    ----------------------------        ----------------------------
                                        1996             1995               1996             1995
<S>                                 <C>              <C>                <C>              <C>
Trust corpus, beginning of period   $66,778,834      $72,169,081        $70,133,536      $79,942,040
Amortization of net overriding
 royalty interest                    (1,662,476)      (1,341,751)        (5,017,178)      (4,114,710)
Distributable income                 22,790,717        3,331,789         29,660,091       12,608,062
Distributions declared              (22,790,717)      (3,331,789)       (29,660,091)     (12,608,062)
                                    -----------      -----------        -----------      -----------

Trust corpus, end of period         $65,116,358      $70,827,330        $65,116,358      $70,827,330
                                    ===========      ===========        ===========      ===========
</TABLE> 

The accompanying notes to condensed financial statements are an integral part of
these statements.

                                      -5-
<PAGE>
 
SAN JUAN BASIN ROYALTY TRUST

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
-------------------------------------------------------------------------------

1.   BASIS OF ACCOUNTING

     The San Juan Basin Royalty Trust ("Trust") was established as of November
     1, 1980. The financial statements of the Trust are prepared on the
     following basis:

     .  Royalty income recorded for a month is the amount computed and paid by
        the interest owner, Burlington Resources Oil & Gas Company
        ("Burlington"), 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 ("Royalty") 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%.

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

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

     .  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 and
     certain cash reserves may be established for contingencies which would not
     be accrued in financial statements prepared in accordance with GAAP.
     Amortization of the Royalty calculated on a unit-of-production basis is
     charged directly to trust corpus.

2.   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 wells beginning in
     1989. Under Section 29 of the Internal Revenue Code, production from coal
     seam gas wells drilled prior to January 1, 1993, qualifies for the federal
     income tax credit for producing non-conventional fuels. This tax credit was
     approximately $1.01 per MMBtu for the year 1995 and is adjusted for
     inflation annually. The credit currently applies to production through the
     year 2002. Each Unit holder must determine his pro rata share of such
     production based upon the number of Units owned during each month of the
     year and apply the tax credit against his own income tax liability, but
     such credit may not reduce his regular tax liability (after the foreign tax
     credit

                                      -6-
<PAGE>
 
     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 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.

3.   ROYALTY INCOME

     Royalty income for the quarter ended September 30, 1996, is comprised of
     $4,313,203, which represents the net overriding royalty interest in the net
     profits of the properties from which the net overriding royalty was carved,
     and $19,822,005 paid to the Trust as a result of the settlement of
     litigation involving Bank One, Texas, NA, as Trustee, Meridian Oil Inc. and
     Southland Royalty Company.

                                    ******

                                      -7-
<PAGE>
 
ITEM 2.  TRUSTEE'S DISCUSSION AND ANALYSIS

THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

The San Juan Basin Royalty Trust received royalty income of $24,135,208 and
interest income of $4,093 during the third quarter of 1996.  Royalty income for
the quarter included $19,822,005 paid to the Trust as a result of the settlement
of litigation involving Bank One, Texas, NA, as Trustee, Meridian Oil Inc., now
known as Burlington Resources Oil & Gas Company ("Burlington"), and Southland
Royalty Company (the "Litigation").  After deducting administrative expenses of
$1,348,584, distributable income for the third quarter was $22,790,717, or
$.488979 per Unit.  In the third quarter of 1995, royalty income was $3,542,265,
interest income was $9,400, administrative expenses were $219,876 and
distributable income was $3,331,789, or $.071482 per Unit.  Based on 46,608,796
Units outstanding, the per Unit distributions for the third quarter of 1996 were
as follows:

<TABLE> 
<CAPTION> 
        <S>                                  <C>
        July                                 $  .026470
        August                                  .008565
        September                               .453944
                                             ----------
        Quarter Total                        $  .488979
                                             ==========
</TABLE> 

The tax credit relating to production from coal seam wells totaled approximately
$.03 per Unit for each of the third quarters of 1996 and 1995.

Royalty income for the third quarter of 1996 was higher than that in the third
quarter of 1995 due to increased prices for gas and oil and the receipt of the
settlement amount.  Interest income was lower in the third quarter of 1996 as
compared to the third quarter of 1995 primarily due to decreased interest rates.
Administrative expenses were higher in the third quarter of 1996 as compared to
the third quarter of 1995 primarily due to increased expenses relating to the
Litigation mentioned above.

The Trustee announced on September 4, 1996, the settlement of the Litigation.
The Litigation, which was filed in the state district court of Santa Fe County,
New Mexico, Cause No. SF 94-1982(c), was dismissed on September 12, 1996.

The claims asserted on behalf of the Trust in the Litigation 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 an injunction
relating to marketing the production from the properties from which the Royalty
was carved (the "Trust Properties"). Burlington denied and continues to deny the
allegations made against it in the Litigation, but the parties agreed to settle
the Litigation as outlined below.

Burlington agreed (i) to pay $19,750,000 in cash plus interest earnings 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.  Burlington 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 Burlington's Val Verde system.  Additionally, the
Trustee and Burlington established a formal protocol intended to provide the
Trustee and its representatives improved access to Burlington's books and
records applicable to the Trust Properties.

                                      -8-
<PAGE>
 
Agreement was also reached regarding marketing arrangements for the sale of
Trust gas, oil and natural gas liquids products going forward as follows:

1)  Burlington's pre-existing contract with a third-party purchaser as pertains
    to baseload gas volumes in the firm amount of 45,000 MMBtu per day will
    remain effective for a period of one year from July 1, 1996. Negotiations
    for the sale of these volumes after June 30, 1997, will be entered into
    prior to the expiration of the primary term of that contract;

2)  The remaining volumes of Trust gas will be marketed by an independent
    marketer, El Paso Energy Marketing Company ("El Paso"), a subsidiary of El
    Paso Energy Corporation, beginning October 1, 1996, under an arrangement
    which provides for a sharing of amounts, if any, earned in excess of
    established gas price thresholds. El Paso's compensation for its marketing
    services will consist solely of its proportionate part of any amount for
    which the gas is sold in excess of the thresholds. Burlington's contract
    with El Paso is for a two-year term beginning October 1, 1996, subject to
    renewal by agreement of the parties;

3)  Burlington will continue to market the Trust oil and natural gas liquids but
    will remit to the Trust actual proceeds from such sales. Burlington 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; and

4)  The marketer of the Trust gas will have access to Burlington's current gas
    transportation, gathering, processing and treating agreements with third
    parties through the remainder of their primary terms. Additionally, El Paso
    may utilize Burlington's Natural Gas Company pipeline to pipelines in West
    Texas for up to 13,333 MMBtu per day of gas produced from Trust properties
    for a period of one year commencing October 1, 1996.

Confidentiality agreements with purchasers of the gas produced from the Trust
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 of the
marketer to compete effectively in the marketplace for the sale of gas produced
from the Trust Properties.

The $19,750,000 plus interest (totaling $19,822,005 or .425285 per unit of
beneficial interest) was paid to the Trust on September 30 and distributed on
October 15, 1996, to unit holders of record as of September 30, 1996.  (See Note
5 to Financial Statements in the Trust's Annual Report for 1995 for further
information on the Litigation.)

Capital costs incurred by Burlington for the third quarter of 1996 amounted to
$2,563,836, as compared to $1,116,789 for the third quarter of 1995. The
increased capital costs in 1996 were primarily attributable to increased
drilling and development activity. Lease operating expenses and property taxes
attributable to the Trust Properties were $3,178,857 for the third quarter of
1996 compared to $2,937,729 for the third quarter of 1995.

In the third quarter of 1996, Burlington advised the Trustee that 1 gross (.83
net) conventional well was recompleted and 7 gross (.29 net) coal seam wells
were recavitated through September 30, 1996.  Three gross (.23 net) conventional
gas wells and 1 gross (.16 net) coal seam well were completed on the Trust
Properties during the third quarter of 1996.  There were 7 gross (.30 net) coal
seam wells and 11 gross (2.06 net) conventional wells in progress on September
30, 1996.

In the third quarter of 1995, 3 gross (.67 net) conventional wells were
completed on the Trust properties.  Thirty-three gross (8.21 net) conventional
wells and 8 gross (2.59 net) coal seam wells were recompleted through September
30, 1995.  There were 4 gross (2.39 net) coal seam wells and 7 gross (2.24 net)
conventional wells in progress on September 30, 1995.

                                      -9-
<PAGE>
 
Unit holders are referred to "Description of the Properties" in the Trust's
Annual Report for 1995 for further information concerning Burlington's coal seam
well drilling program in the San Juan Basin.  This program includes properties
in which the Trust owns an interest.

Gas and oil sales for the quarters ended September 30, 1996 and 1995, were as
follows:

<TABLE>
<CAPTION>
                                                       1996         1995
<S>                                                 <C>          <C>
PROPERTIES FROM WHICH THE ROYALTY WAS CARVED:

Gas:
 Total Mcf                                           10,656,613   8,905,543
 Mcf per day                                            115,833      96,799
 Average price (per Mcf)                                  $1.18       $1.08
 
Oil:
 Total Bbls                                              24,538      22,314
 Bbls per day                                               267         243
 Average price (per Bbl)                                 $19.15      $13.82
 
ATTRIBUTABLE TO THE ROYALTY:
 
Gas sales (Mcf)                                       3,945,599   3,605,926
Oil sales (Bbls)                                          9,288       8,819
</TABLE>

The third quarter production figures are associated with actual oil and gas
production during May through July.  In the third quarter of 1996, gas prices
for sales from the Trust Properties were higher primarily due to increased spot
market prices.  Production from coal seam wells on such properties totaled
4,534,093 Mcf during the third quarter of 1996, compared to 3,423,885 Mcf during
the third quarter of 1995.  The average oil price for the third quarter of 1996
was higher than that for the third quarter of 1995, primarily as a result of
increases in the posted prices.  Since the oil and gas sales attributable to the
Royalty are based on an allocation formula that is dependent upon such factors
as price and costs (including capital expenditures), the production amounts do
not provide a meaningful comparison.

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

For the nine months ended September 30, 1996, distributable income was
$29,660,091 ($.636361 per Unit) which was more than the $12,608,062 ($.270507
per Unit) of income distributed during the same period in 1995.  Royalty income
decreased from $13,476,447 in the first nine months of 1995 as compared to
$13,068,332 in the first nine months of 1996 primarily as a result of decreases
in the average price of gas.  For the nine month period ended September 30,
1996, the tax credit relating to production from coal seam wells totaled
approximately $.10 per Unit in comparison to $.09 per Unit for the same period
in 1995.  Interest income for the nine months ended September 30, 1996 was
$17,925 compared to $28,432  during the first nine months of 1995.  The decrease
in interest income was due to the decrease in funds available for investment.

Capital costs incurred for the nine month period ending September 30, 1996 were
$5,226,791.  For the first nine months of 1995, capital expenditures totaled
$4,146,532.  The increase was due primarily to increased drilling activity.
Burlington advised that during the nine months ended September 30, 1996, 2 gross
(.66 net) coal seam and 11 gross (1.37 net) conventional productive wells were
completed on Trust Properties.  Thirteen gross (4.96 net) coal seam wells and 9
gross (5.37 net) conventional wells were recompleted through September 30, 1996.
There were 7 gross (.30 net) coal seam wells and 11 gross (2.06 net)
conventional wells in progress at September 30, 1996.  For the corresponding
1995 period, 4 gross (1.54 net) coal seam and 24 gross (6.36 net) 

                                      -10-
<PAGE>
 
conventional productive wells were drilled on the Trust Properties. Thirteen
gross (7.59 net) coal seam wells and 33 gross (8.21 net) conventional wells were
recompleted through September 30, 1995. There were 4 gross (2.39 net) coal seam
wells and 7 gross (2.24 net) conventional wells in progress at September 30,
1995.

Lease operating expenses and property taxes totaled approximately $8,947,008 for
the first nine months of 1996 compared to $7,682,175 for the first nine months
of 1995.

For the nine months ended September 30, 1996 and 1995, gas and oil sales
compared as follows:

<TABLE>
<CAPTION>
                                                       1996         1995
<S>                                                 <C>          <C>
 
PROPERTIES FROM WHICH THE ROYALTY WAS CARVED:

Gas:
 Total sales (Mcf)                                   30,203,245   25,457,338
 Mcf per day                                            110,231       93,250
 Average price (per Mcf)                                  $1.15        $1.29
 
Oil:
 Total sales (Bbls)                                      64,092       57,333
 Bbls per day                                               234          210
 Average price (per Bbl)                                 $19.17       $14.37
 
ATTRIBUTABLE TO THE ROYALTY:
 Gas sales (Mcf)                                     12,449,648   11,467,199
 Oil sales (Bbls)                                        26,532       25,761
</TABLE>

The first nine months production figures are associated with actual oil and gas
production during November 1995 through July 1996.  The average price of gas
sold from the properties from which the Royalty was carved decreased from $1.29
per Mcf to $1.15 per Mcf primarily as a result of lower spot market prices in
1996. The average price per barrel of oil increased due to higher posted prices.
Since the oil and gas sales attributable to the Royalty is based on an
allocation formula that is dependent upon such factors as price and costs
(including capital expenditures), the production amounts do not provide a
meaningful comparison.

                                      -11-
<PAGE>
 
ROYALTY CALCULATION:

Royalty income received by the Trust for the three months and nine months ended
September 30, 1996 and 1995, respectively, was computed as shown in the
following table:

<TABLE> 
<CAPTION> 
                                        Three Months Ended                  Nine Months Ended
                                           September 30,                       September 30,
                                    ----------------------------        ----------------------------
                                        1996             1995               1996             1995
<S>                                 <C>              <C>                <C>              <C>
Gross proceeds of sales
   from the properties from
   which the net overriding
   royalty was carved:

   Gas proceeds                     $12,563,259      $9,621,865         $34,609,854      $32,726,022
   Oil proceeds                         469,868         308,458           1,228,908          823,952
   Other proceeds                                         2,592                                2,592
                                    -----------      ----------         -----------      -----------
                                                                   
           Total                     13,033,127       9,932,915          35,838,762       33,552,566
                                    -----------      ----------         -----------      -----------
                                                                   
Less production costs:                                             
   Severance tax - Gas                1,430,319       1,120,850           4,047,528        3,670,520
   Severance tax - Oil                   50,089          34,527             133,903           84,743
   Lease operating expenses                                        
      and property tax                3,178,857       2,937,729           8,947,008        7,682,175
   Capital expenditures               2,563,836       1,116,789           5,226,791        4,146,532
   Other                                 59,089                              59,089
                                    -----------      ----------         -----------      -----------
                                                                   
           Total                      7,282,190       5,209,895          18,414,319       15,583,970
                                    -----------      ----------         -----------      -----------
                                                                   
Net profits                           5,750,937       4,723,020          17,424,443       17,968,596
                                    -----------      ----------         -----------      -----------
                                                                   
Net overriding royalty                                             
   interest                                  75 %            75 %                75 %             75 %
                                    -----------      ----------         -----------      -----------
                                                                   
Royalty income                      $ 4,313,203      $3,542,265         $13,068,332      $13,476,447
                                    ===========      ==========         ===========      ===========

</TABLE>

                                      -12-
<PAGE>
 
                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         The information called for is disclosed in Item 2 of Part I and is
         incorporated into this Part II by reference.

                                      -13-
<PAGE>
 
Items 2-5  Not Applicable

Item 6.    Exhibits and Reports on Form 8-K

           (a)  Exhibits

                (4)(a) San Juan Basin Royalty Trust Indenture dated November 3,
                       1980, between Southland Royalty Company (now Burlington
                       Resources Oil & Gas Company) and The Fort Worth National
                       Bank (now Bank One, Texas, NA), as Trustee, heretofore
                       filed as Exhibit (4)(a) to the Trust's Annual Report on
                       Form 10-K to the Securities and Exchange Commission for
                       the fiscal year ended December 31, 1980 is incorporated
                       herein by reference.

                (4)(b) Net Overriding Royalty Conveyance from Southland Royalty
                       Company (now Burlington Resources Oil & Gas Company) to
                       The Fort Worth National Bank (now Bank One, Texas, NA),
                       as Trustee, dated November 3, 1980 (without Schedules),
                       heretofore filed as Exhibit (4)(b) to the Trust's Annual
                       Report on Form 10-K to the Securities and Exchange
                       Commission for the fiscal year ended December 31, 1980 is
                       incorporated herein by reference.

                (27)   Financial Data Schedule

           (b)  Reports on Form 8-K

                The San Juan Basin Royalty Trust (the "Trust") filed one report
                on Form 8-K during the three-month period ended September 30,
                1996. The item reported was the settlement of the litigation
                (the "Litigation") filed by Bank One, Texas, NA, as Trustee of
                the Trust against Meridian Oil Inc. (now known as Burlington
                Resources Oil & Gas Company) and Southland Royalty Company in
                the state district court of Santa Fe County, New Mexico in Cause
                No. SF 94-1982(c). For a more particular description of the
                Litigation, see Item 2 of Part I hereof. The report on Form 8-K
                was dated September 20, 1996. No financial statement was filed.

                                      -14-
<PAGE>
 
                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

                             BANK ONE, TEXAS, NA, AS TRUSTEE FOR THE
                             SAN JUAN BASIN ROYALTY TRUST



                                    By    LEE ANN ANDERSON
                                       ----------------------------------------
                                          Lee Ann Anderson
                                           Vice President

Dated as of November 14, 1996


              (The Trust has no directors or executive officers.)

                                      -15-
<PAGE>
 
                               INDEX TO EXHIBITS


                                                                    SEQUENTIALLY
       EXHIBIT                                                        NUMBERED
       NUMBER                 EXHIBIT                                   PAGE

       (4)(a)  San Juan Basin Royalty Trust Indenture dated 
               November 3, 1980, between Southland Royalty Company 
               (now Burlington Resources Oil & Gas Company) and 
               The Fort Worth National Bank (now Bank One, Texas, 
               NA), as Trustee, heretofore filed as Exhibit (4)(a) 
               to the Trust's Annual Report on Form 10 K to the 
               Securities and Exchange Commission for the fiscal 
               year ended December 31, 1980 is incorporated herein 
               by reference.*


       (4)(b)  Net Overriding Royalty Conveyance from Southland 
               Royalty Company (now Burlington Resources Oil & Gas 
               Company) to The Fort Worth National Bank (now Bank One,
               Texas, NA), as Trustee, dated November 3, 1980 (without
               Schedules), heretofore filed as Exhibit (4)(b) to the 
               Trust's Annual Report on Form 10-K to the Securities
               and Exchange Commission for the fiscal year ended 
               December 31, 1980 is incorporated herein by reference.*

         (27)  Financial Data Schedule **


*   A copy of this Exhibit is available to any Unit holder, at the actual cost
    of reproduction, upon written request to the Trustee, Bank One, Texas, NA,
    P.O. Box 2604, Fort Worth, Texas 76113.

**  Filed herewith.