##### Table of Contents



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
    September 30, 2011oro

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

75-6279898(State or other jurisdiction
    of
    incorporation or organization)

(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 IItem 1. Financial Statements.CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUSCONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)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 II OTHER INFORMATIONItem 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
  September 30,


December 31,2011


2010(Unaudited)ASSETSCash and short-term investments

$
6,374,847


$
5,223,123Net overriding royalty interest in producing oil and gas
    properties (net of accumulated amortization of $119,692,700 and
    $118,529,644 at September 30, 2011 and December 31,
    2010, respectively)


13,582,828



14,745,884$
19,957,675


$
19,969,007LIABILITIES AND TRUST CORPUSDistribution payable to Unit Holders

$
6,219,058


$
5,067,334Cash reserves


155,789



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


13,582,828



14,745,884$
19,957,675


$
19,969,007   CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME
    (UNAUDITED)
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2011


2010


2011


2010Royalty income

$
17,886,286


$
19,033,188


$
48,843,626


$
63,485,843Interest income


1,329



3,646



685,855



216,735Total revenue


17,887,615



19,036,834



49,529,481



63,702,578General and administrative expenditures


227,539



198,836



1,276,041



1,654,681Distributable income

$
17,660,076


$
18,837,998


$
48,253,440


$
62,047,897Distributable income per Unit (46,608,796 Units)

$
0.378900


$
0.404173


$
1.035285


$
1.331249  
  CONDENSED
    STATEMENTS OF CHANGES IN TRUST CORPUS
    (UNAUDITED)
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2011


2010


2011


2010Trust corpus, beginning of period

$
13,986,056


$
15,801,981


$
14,745,884


$
16,843,731Amortization of net overriding royalty interest


(403,228
)


(540,605
)


(1,163,056
)


(1,582,355
)Distributable income


17,660,076



18,837,998



48,253,440



62,047,897Distributions declared


(17,660,076
)


(18,837,998
)


(48,253,440
)


(62,047,897
)Trust corpus, end of period

$
13,582,828


$
15,261,376


$
13,582,828


$
15,261,376    3




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##### Table of Contents



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         4




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SAN JUAN
    BASIN ROYALTY TRUST
  NOTES TO
    CONDENSED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
      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,
    Jicarilla Apache
    Nation v. Department of Interior
 5




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##### Table of Contents



SAN JUAN
    BASIN ROYALTY TRUST
  NOTES TO
    CONDENSED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
    Abraham
    et al. v. BP America Production Company No. 6:09-cv-00961,
 6




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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
         7




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Three
    Months Ended September 30, 2011 and 2010
  per-Unit
  July

$
.129817August


.115652September


.133431Quarter Total

$
.378900            8




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Three Months EndedSeptember 30,2011


2010Gas:Total sales (Mcf)


8,565,498



8,357,488Mcf per day


93,103



90,842Average price (per Mcf)

$
4.94


$
4.72Oil:Total sales (Bbls)


14,701



17,524Bbls per day


160



190Average price (per Bbl)

$
84.89


$
63.48       year-to-year
   9




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Nine
    Months Ended September 30, 2011 and 2010
           10




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Nine Months EndedSeptember 30,2011


2010Gas:Total sales (Mcf)


24,388,870



24,597,234Mcf per day


89,337



90,100Average price (per Mcf)

$
4.72


$
5.00Oil:Total Sales (Bbls)


43,318



45,385Bbls per day


159



166Average price (per Bbl)

$
83.12


$
67.31   Calculation
    of Royalty Income
    CALCULATION
    OF ROYALTY INCOME
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2011


2010


2011


2010Gross proceeds of sales from the Underlying Properties:Gas proceeds

$
42,209,984


$
39,469,691


$
114,961,156


$
126,416,015
(1)Oil proceeds


1,248,036



1,112,462



3,600,453



3,054,682Total


43,458,020



40,582,153



118,561,609



129,470,697Less production costs:Severance tax  gas


3,872,807



3,634,900



10,559,177



11,285,302Severance tax  oil


115,679



111,545



359,139



291,433Lease operating expense and property tax


9,089,017



8,396,991



26,720,319



24,522,938Capital expenditures


6,532,136



3,061,133



15,798,139



8,723,233Total


19,609,639



15,204,569



53,436,774



44,822,906Net profits


23,848,381



25,377,584



65,124,835



84,647,791Net overriding royalty interest


75
%


75
%


75
%


75
%Royalty Income

$
17,886,286


$
19,033,188


$
48,843,626


$
63,485,843     (1)
    
    Includes $2.6 million from the April 2010 settlement of
    litigation.  Contractual
    Obligations
  1 30
 11




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Effects
    of Securities Regulation
    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.   12




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Item 4.
    Controls
    and Procedures.  Form 10-Q
    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,
 13




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##### Table of Contents



L.P. No. D1329-CV-08-751,
    Jicarilla Apache
    Nation v. Department of Interior
  Abraham
    et al. v. BP America Production Company No. 6:09-cv-00961,
 14




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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 November 9, 2011, 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 November 9, 2011, 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. 15




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




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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 November 9, 2011, 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 November 9, 2011, 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.