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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended
    March 31, 2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File
    No. 1-8032
 San Juan
    Basin Royalty Trust
 (Exact name of registrant as
    specified in the Amended and Restated San Juan Basin
    Royalty Trust Indenture)
  Texas(State or other jurisdiction
    of
    incorporation or organization)

75-6279898(I.R.S. Employer
    Identification No.)   Compass Bank
    2525 Ridgmar Boulevard, Suite 100
    Fort Worth, Texas 76116 (Address of principal
    executive offices)
    (Zip Code)
  (866) 809-4553 (Registrants telephone
    number, including area code)
  N/A
 (Former name, former address and
    former fiscal year, if changed since last report)
  þ o
  Regulation S-T o o
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller
    reporting company)   Rule 12b-2 o þ




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TABLE OF CONTENTS  PART IFINANCIAL INFORMATIONItem 1. Financial Statements.Item 2. Trustees Discussion and Analysis of Financial Condition and Results of Operations.Item 3. Quantitative and Qualitative Disclosures About Market Risk.Item 4. Controls and Procedures.PART IIItem 1. Legal Proceedings.Item 6. Exhibits.SIGNATURESINDEX TO EXHIBITSEX-31EX-32    Table of Contents   SAN JUAN
    BASIN ROYALTY TRUST
 
  PART I
 
  FINANCIAL
    INFORMATION
 
  Item 1.
    Financial
    Statements.  Form 10-K
 2




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SAN JUAN
    BASIN ROYALTY TRUST
 CONDENSED
    STATEMENTS OF ASSETS, LIABILITIES AND
    TRUST CORPUS
  March 31,


December 31,2010


2009(Unaudited)ASSETSCash and short-term investments

$
8,555,869


$
5,341,482Net overriding royalty interest in producing oil and gas
    properties (net of accumulated amortization of $116,952,038 and
    $116,431,797 at March 31, 2010 and December 31, 2009,
    respectively)


16,323,490



16,843,731$
24,879,359


$
22,185,213LIABILITIES AND TRUST CORPUSDistribution payable to Unit Holders

$
8,400,080


$
5,185,693Cash reserves


155,789



155,789Trust corpus  46,608,796 Units of beneficial interest
    authorized and outstanding


16,323,490



16,843,731$
24,879,359


$
22,185,213    3




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CONDENSED
    STATEMENTS OF DISTRIBUTABLE INCOME
  Three Months EndedMarch 31,2010


2009(Unaudited)Royalty income

$
22,002,516


$
9,550,576Interest income


208,313



2,605Total Revenue


22,210,829



9,553,181General and administrative expenditures


(681,511
)


(583,745
)Distributable income

$
21,529,318


$
8,969,436Distributable income per Unit (46,608,796 Units)

$
0.461915


$
0.192440    4




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CONDENSED
    STATEMENTS OF CHANGES IN TRUST CORPUS
  Three Months EndedMarch 31,2010


2009(Unaudited)Trust corpus, beginning of period

$
16,843,731


$
17,927,498Amortization of net overriding royalty interest


(520,241
)


(246,509
)Distributable income


21,529,318



8,969,436Distributions declared


(21,529,318
)


(8,969,436
)Total corpus, end of period

$
16,323,490


$
17,680,989    5




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SAN JUAN
    BASIN ROYALTY TRUST
 NOTES TO
    CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
  1.
    BASIS OF
    ACCOUNTING    
    Royalty income recorded for a month is the amount computed and
    paid with respect to the Trusts 75% net overriding royalty
    interest (the Royalty) in certain oil and gas
    leasehold and royalty interests (the Underlying
    Properties) by Burlington Resources Oil & Gas
    Company LP (BROG), the present owner of the
    Underlying Properties, to the Trustee for the Trust. Royalty
    income consists of the proceeds received by BROG from the sale
    of production from the Underlying Properties less accrued
    production costs, development and drilling costs, applicable
    taxes, operating charges, and other costs and deductions,
    multiplied by 75%. The calculation of net proceeds by BROG for
    any month includes adjustments to proceeds and costs for prior
    months and impacts the Royalty income paid to the Trust and the
    distribution to Unit Holders for that month.
    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 Royalty to the Trust
    provides that any excess of development and production costs
    applicable to the Underlying Properties over gross proceeds from
    such properties must be recovered from future net proceeds
    before Royalty income is again paid to the Trust.  unit-of-production
    2.
    FEDERAL
    INCOME TAXES         6




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3.
    CONTINGENCIES    4.
    SETTLEMENTS
    AND LITIGATION  United States of America ex rel. Harrold E.
    (Gene) Wright v. AGIP Petroleum Co. et al.
  San Juan Basin Royalty Trust vs. Burlington Resources
    Oil & Gas Company, L.P. No. D1329-CV-08-751,
         7




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Item 2.
    Trustees
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Forward-Looking
    Information
  Form 10-Q
  Business
    Overview
            Three
    Months Ended March 31, 2010 and 2009
   8




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per-Unit
  January

$
.138004February


.143686March


.180225Quarter Total

$
.461915                  9




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Three Months EndedMarch 31,2010

2009Gas:Total sales (Mcf)


8,528,870



8,558,550Mcf per day


92,705



93,028Average price (per Mcf)

$
5.16


$
4.04Oil:Total sales (Bbls)


13,160



10,982Bbls per day


143



119Average price (per Bbl)

$
67.66


$
40.50     year-to-year
      inter alia month-to-month
   10




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Calculation
    of Royalty Income
    CALCULATION
    OF ROYALTY INCOME
  Three Months EndedMarch 31,2010


2009Gross proceeds of sales from the Underlying Properties:Gas proceeds

$
43,985,932


$
34,594,861Oil proceeds


890,469



444,735Total


44,876,401



35,039,596Less production costs:Severance tax  Gas


4,015,446



3,126,253Severance tax  Oil


82,151



42,796Lease operating expense and property tax


8,013,093



9,269,559Capital expenditures


3,429,023



9,866,887Total


15,539,713



22,305,495Net profits


29,336,688



12,734,101Net overriding royalty interest


75
%


75
%Royalty Income

$
22,002,516


$
9,550,576   Contractual
    Obligations
  1 30
  Effects
    of Securities Regulation
   11




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Critical
    Accounting Policies
    
    Royalty Income recorded for a month is the amount computed and
    paid pursuant to the Conveyance by BROG to the Trustee for the
    Trust. Royalty Income consists of the proceeds received by BROG
    from the sale of production from the Underlying Properties less
    accrued production costs, development and drilling costs,
    applicable taxes, operating charges, and other costs and
    deductions, multiplied by 75%. The calculation of net proceeds
    by BROG for any month includes adjustments to proceeds and costs
    for prior months and impacts the Royalty Income paid to the
    Trust and the distribution to Unit Holders for that month.
    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 Royalty to the Trust
    provides that any excess of development and production costs
    applicable to the Underlying Properties over gross proceeds from
    such properties must be recovered from future net proceeds
    before Royalty Income is again paid to the Trust.  unit-of-production
 
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.   
  Item 4.
    Controls
    and Procedures.  Form 10-Q
   12




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Form 10-Q
   
  PART II
  OTHER
    INFORMATION
 
  Item 1.
    Legal
    Proceedings.  Form 10-Q
  United States of America ex rel. Harrold E.
    (Gene) Wright v. AGIP Petroleum Co. et al.
  San Juan Basin Royalty Trust vs. Burlington Resources
    Oil & Gas Company, L.P. No. D1329-CV-08-751,
   13




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Item 6.
    Exhibits.  (4)(a)

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

Net Overriding Royalty Conveyance from Southland Royalty Company
    to the Fort Worth National Bank, as Trustee, dated
    November 3, 1980 (without Schedules), heretofore filed as
    Exhibit 4(b) to the Trusts Annual Report on
    Form 10-K
    filed with the Commission for the fiscal year ended
    December 31, 2007, is incorporated herein by reference.*(4)(c)

Assignment of Net Overriding Interest (San Juan Basin
    Royalty Trust), dated September 30, 2002, between Bank One,
    N.A. and TexasBank, heretofore filed as Exhibit 4(c) to the
    Trusts Quarterly Report on
    Form 10-Q
    filed with the Commission for the quarter ended
    September 30, 2002, is incorporated herein by reference.*31

Certification required by
    Rule 13a-14(a),
    dated May 10, 2010, by Lee Ann Anderson, Vice President and
    Senior Trust Officer of Compass Bank, the Trustee of the
    Trust.**32

Certification required by
    Rule 13a-14(b),
    dated May 10, 2010, by Lee Ann Anderson, Vice President and
    Senior Trust Officer of Compass Bank, on behalf of Compass
    Bank, the Trustee of the Trust.***     *
    
    A copy of this exhibit is available to any Unit Holder (free of
    charge) upon written request to the Trustee, Compass Bank, 2525
    Ridgmar Boulevard, Suite 100, Fort Worth, Texas 76116.**
    
    Filed herewith.***
    
    Furnished herewith. 14




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SIGNATURES
       By:
    /s/  Lee
    Ann Anderson       (The Trust
    has no directors or executive officers.)
 15




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INDEX TO
    EXHIBITS
  ExhibitNumber

Description(4)(a)

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

Net Overriding Royalty Conveyance from Southland Royalty Company
    to the Fort Worth National Bank, as Trustee, dated
    November 3, 1980 (without Schedules), heretofore filed as
    Exhibit 4(b) to the Trusts Annual Report on
    Form 10-K
    filed with the Commission for the fiscal year ended
    December 31, 2007, is incorporated herein by reference.*(4)(c)

Assignment of Net Overriding Interest (San Juan Basin
    Royalty Trust), dated September 30, 2002, between Bank One,
    N.A. and TexasBank, heretofore filed as Exhibit 4(c) to the
    Trusts Quarterly Report on
    Form 10-Q
    with the Commission for the quarter ended September 30,
    2002, is incorporated herein by reference.*31

Certification required by
    Rule 13a-14(a),
    dated May 10, 2010, by Lee Ann Anderson, Vice President and
    Senior Trust Officer of Compass Bank, the Trustee of the
    Trust.**32

Certification required by
    Rule 13a-14(b),
    dated May 10, 2010, by Lee Ann Anderson, Vice President and
    Senior Trust Officer of Compass Bank, on behalf of Compass
    Bank, the Trustee of the Trust.***     *
    
    A copy of this exhibit is available to any Unit Holder (free of
    charge) upon written request to the Trustee, Compass Bank, 2525
    Ridgmar Boulevard, Suite 100, Fort Worth, Texas 76116.**
    
    Filed herewith.***
    
    Furnished herewith.