San Juan Shenanigans

Two important pieces of infrastructure in the San Juan Basin, home to the assets of CRT and SJT, are changing hands to high Greed Gauge partnerships.  Duke Energy’s TEPPCO Partners will buy gathering assets from Burlington Resources, operator of SJT’s properties.  El Paso will transfer natural gas assets to El Paso Energy Partners.  Continually skeptical that gatherers, processors and marketers may be taking advantage of producers, our alert is heightened by our strong concern that sponsors of the partnerships may be motivated by excess greed.  We are reassured that the trustee of SJT has sued successfully in the past to guard the valuable trust assets.  Moreover the State of New Mexico has a vested interest in fair wellhead prices that form the basis of CRT and SJT revenues as well as severance taxes to the state.  Though we do not hesitate to call attention to potentially negative factors we are confident in the long-term investment values of the three trusts.

June 6, 2002; Natural Gas Royalty Trusts: San Juan Shenanigans