October 28, 2002; SJT Upside Volume Surprise 

Investors in recommended San Juan Basin Royalty Trust received a nice surprise on October 21 when the trustee disclosed a monthly distribution for October of $0.12 a unit compared to our estimate of $0.08.  There seems to be an unmistakable upward trend in volume that is surprisingly strong for a gas property that has already been producing for 50 years (see Chart).  That triggers an increase in estimated present value despite our cautious projection of a more rapid decline rate from the higher volume.   At the same time present value was also boosted as six-year natural gas futures broke through its 29-week average to reestablish an upward price trend (see Meter Reader). The better volume trend further contributes to an increase in estimated Next Twelve Months Distribution despite lower one-year natural gas futures for the week.