SJT Successor Trustee Nominated

We took the unusual step of nominating an independent bank, TexasBank of Fort Worth, as the successor to Bank One as the trustee of San Juan Basin Royalty Trust before knowing that the current trustee has nominated a successor.  Because owners of at least 15% of the units of the trust concurred with our nomination as apparently required by the bylaws of the trust, we expect our nominee to be on the proxy statement to be mailed to unitholders by the current trustee.  Ours may be the only nomination if Bank One concurs.  We encourage those unitholders who support our nomination to express their opinion to sjbrt@bankone.com as soon as possible.  

Potential Conflict of Interest Drives Our Nomination

The precipitating factor for our unusual initiative was the concern that the current trustee might nominate a major bank/investment bank as successor.  We worry about the potential conflict of interest we have highlighted in our research.  Disputes inevitably arise among producers, processors, transporters and marketers.  We fear that if the new trustee is underwriter, dealmaker or lender for potentially adversarial parties, the trust could be disadvantaged in the resolution of a conflict of interest. 

Continuity of Management is Desirable

We nominated TexasBank because future conflicts appear less likely.  We also expect the current representative of the trustee, Ms. Lee Ann Anderson, to join that bank.   If TexasBank becomes trustee, Ms. Anderson is expected to be their representative.  We have previously expressed our confidence in Ms. Anderson. 

There are few independent banks left in an industry in consolidation after difficult times a decade ago.  We have made checks that confirm the suitability of TexasBank and we expect to investigate further.  Officers at the bank have oil and gas and royalty trust experience.   Yet we do not represent that we will complete as much due diligence as a paid advisor might be obligated to do.  We would appreciate hearing from any investors who have knowledge about our nominee that we may not have.