San Juan Basin Royalty Trust (NYSE:SJT) is a natural gas trust that receives proceeds from wells operated by Burlington Resources (a subsidiary of ConocoPhillips (NYSE:COP)) in northwestern New Mexico. SJT recently announced a $0.0867/sh. distribution for December 2013 sales and its shares have recently traded around $18/sh. Considering two months in early 2013 when SJT failed to pay a distribution, its 12-month trailing yield is a paltry 4.8%.
Better times are ahead. The distribution has already staged a mild recovery, but with a continued steep decline in well development costs and rising natural gas prices, my analysis suggests that SJT's monthly distribution is set to surge an additional 50% in the coming months-likely starting with January...
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