<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

              [X] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                For the quarterly period ended September 30, 2003


                                       or

              [ ] Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                   For the transition period from ____ to ____

                         Commission File Number: 1-11608

                      WILLIAMS COAL SEAM GAS ROYALTY TRUST
             (Exact name of registrant as specified in its charter)


            Delaware                                75-6437433
  (State or other jurisdiction                   (I.R.S. Employer
       of incorporation or                      Identification No.)
          organization)

                                 Trust Division
                              Bank of America, N.A.
                                 901 Main Street
                                   17th Floor
                               Dallas, Texas 75202
                    (Address of principal executive offices)
                                   (Zip code)

                                 (214) 209-2400
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes  x  No
                                              ---    ---

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes.    No x
                                                    ---   ---

         Number of units of beneficial interest outstanding at November 1, 2003:
9,700,000


<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1. Financial Statements.

         The financial statements included herein have been prepared by Bank of
America, N.A., as Trustee (the "Trustee") of Williams Coal Seam Gas Royalty
Trust (the "Trust"), pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in annual financial statements have been condensed or omitted pursuant
to such rules and regulations, although the Trustee believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Trust's Annual Report
on Form 10-K for the year ended December 31, 2002 (the "2002 Annual Report").
The December 31, 2002 balance sheet is derived from the audited balance sheet of
that date. In the opinion of the Trustee, all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the assets,
liabilities and trust corpus of the Trust as of September 30, 2003, the
distributable income for the three-month and nine-month periods ended September
30, 2003 and 2002, and the changes in trust corpus for the nine-month periods
ended September 30, 2003 and 2002, have been included. The distributable income
for such interim periods is not necessarily indicative of the distributable
income for the full year.

         The financial statements as of September 30, 2003, and for the
three-month and nine-month periods ended September 30, 2003 and 2002 included
herein have been reviewed by Ernst & Young LLP, independent public accountants,
as stated in their report appearing herein.



                                       2
<PAGE>


                     Independent Accountants' Review Report


The Trustee of Williams Coal Seam Gas Royalty Trust


We have reviewed the accompanying condensed statement of assets, liabilities and
trust corpus of the Williams Coal Seam Gas Royalty Trust as of September 30,
2003, and the related condensed statements of distributable income for the
three-month and nine-month periods ended September 30, 2003 and 2002, and the
condensed statements of changes in trust corpus for the nine month periods ended
September 30, 2003 and 2002. These financial statements are the responsibility
of the Trustee.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.

As described in Note 2 to the financial statements, these financial statements
have been prepared on a modified cash basis of accounting, which is a
comprehensive basis of accounting other than accounting principles generally
accepted in the United States.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed financial statements referred to above for
them to be in conformity with the basis of accounting described in Note 2.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the statement of assets, liabilities and trust
corpus of the Williams Coal Seam Gas Royalty Trust as of December 31, 2002, and
the related statements of distributable income and changes in trust corpus for
the year then ended (not presented herein) and in our report dated March 24,
2003, we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying condensed statement of
assets, liabilities and trust corpus as of December 31, 2002, is fairly stated,
in all material respects, in relation to the statement of assets, liabilities
and trust corpus from which it has been derived.

                                                               Ernst & Young LLP


Tulsa, Oklahoma
November 10, 2003


                                       3
<PAGE>


WILLIAMS COAL SEAM GAS ROYALTY TRUST

CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS (UNAUDITED)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                     September 30,   December 31,
                                                          2003           2002
                                                     -------------   ------------
<S>                                                  <C>             <C>
ASSETS

Current Assets - cash and cash equivalents           $      90,621   $    115,051

Royalty interests in oil and gas properties
      (less accumulated amortization
      of $123,195,801 at
      September 30, 2003 and
      $120,441,263 at December 31, 2002)                15,370,862     18,125,400
                                                     -------------   ------------

TOTAL ASSETS                                         $  15,461,483   $ 18,240,451
                                                     =============   ============


LIABILITIES AND TRUST CORPUS

Current Liabilities -trust expenses payable          $      96,630   $     75,403

Trust corpus -9,700,000 units of
      beneficial interest authorized
      and outstanding                                   15,364,853     18,165,048
                                                     -------------   ------------

TOTAL LIABILITIES
      AND TRUST CORPUS                               $  15,461,483   $ 18,240,451
                                                     =============   ============
</Table>


The accompanying notes are an integral part of these financial statements. See
accountants' review report.


                                       4
<PAGE>


WILLIAMS COAL SEAM GAS ROYALTY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                     THREE MONTHS           THREE MONTHS
                                                        ENDED                   ENDED
                                                  September 30, 2003      September 30, 2002
                                                  ------------------      ------------------
<S>                                               <C>                     <C>
Royalty income                                    $        4,191,222      $        2,341,940
Interest income                                                2,508                   2,042
                                                  ------------------      ------------------
                                                           4,193,730               2,343,982

General and administrative
      expenses                                              (165,658)               (118,154)
                                                  ------------------      ------------------
Distributable income                              $        4,028,072      $        2,225,828
                                                  ==================      ==================

Distributable income per unit
      (9,700,000 units)                           $              .42      $              .23
                                                  ==================      ==================
</Table>


The accompanying notes are an integral part of these financial statements. See
accountants' review report.

--------------------------------------------------------------------------------


                                       5
<PAGE>


WILLIAMS COAL SEAM GAS ROYALTY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                      NINE MONTHS            NINE MONTHS
                                                         ENDED                  ENDED
                                                  September 30, 2003      September 30, 2002
                                                  ------------------      ------------------
<S>                                               <C>                     <C>
Royalty income                                    $       10,318,848      $        5,694,286
Interest income                                                7,034                   4,930
                                                  ------------------      ------------------
                                                          10,325,882               5,699,216

General and administrative
    expenses                                                (615,677)               (536,469)
                                                  ------------------      ------------------
Distributable income                              $        9,710,205      $        5,162,747
                                                  ==================      ==================

Distributable income per unit
    (9,700,000 units)                             $             1.00      $              .53
                                                  ==================      ==================
</Table>


The accompanying notes are an integral part of these financial statements. See
accountants' review report.


--------------------------------------------------------------------------------


                                       6
<PAGE>


WILLIAMS COAL SEAM GAS ROYALTY TRUST

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                      NINE MONTHS            NINE MONTHS
                                                         ENDED                  ENDED
                                                  September 30, 2003      September 30, 2002
                                                  ------------------      ------------------
<S>                                               <C>                     <C>
Trust corpus, beginning of period                 $       18,165,048      $       22,544,752

Amortization of royalty interests                         (2,754,538)             (3,062,968)

Distributable income                                       9,710,205               5,162,747
Distributions to unitholders                              (9,755,862)             (5,154,201)
                                                  ------------------      ------------------
Trust corpus, end of period                       $       15,364,853      $       19,490,330
                                                  ==================      ==================

Distributions per unit
   (9,700,000 units)                              $             1.01      $              .53
                                                  ==================      ==================
</Table>



The accompanying notes are an integral part of these financial statements. See
accountants' review report.


--------------------------------------------------------------------------------


                                       7
<PAGE>


WILLIAMS COAL SEAM GAS ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

1. TRUST ORGANIZATION AND PROVISIONS

         Williams Coal Seam Gas Royalty Trust (the "Trust") was formed as a
Delaware business trust pursuant to the terms of the Trust Agreement of Williams
Coal Seam Gas Royalty Trust (as amended, the "Trust Agreement") entered into
effective as of December 1, 1992, by and among Williams Production Company, a
Delaware corporation ("WPC"), as trustor, The Williams Companies, Inc., a
Delaware corporation ("Williams"), and Bank of America, N.A., as successor to
NationsBank, N.A., a national banking association (the "Trustee"), and Chemical
Bank Delaware, a Delaware banking corporation (the "Delaware Trustee"), as
trustees. The trustees are independent financial institutions.

         The Trust was formed to acquire and hold certain net profits interests
(the "Royalty Interests") in proved natural gas properties located in the San
Juan Basin of New Mexico and Colorado (the "Underlying Properties") owned at the
time of the Trust's formation by WPC. The Trust was initially created effective
as of December 1, 1992, with a $100 contribution by WPC. On January 21, 1993,
the Royalty Interests were conveyed to the Trust by WPC pursuant to the Net
Profits Conveyance (the "Conveyance") dated effective as of October 1, 1992, by
and among WPC, Williams, the Trustee and the Delaware Trustee, in consideration
for all the 9,700,000 authorized units of beneficial interest in the Trust
("Units"). WPC transferred its Units by dividend to its parent, Williams, which
sold an aggregate of 5,980,000 Units to the public through various underwriters
in January and February 1993 (the "Public Offering"). Subsequently, Williams
sold to the public an additional 151,209 Units. During the second quarter of
1995, Williams transferred its remaining Units to Williams Holdings of Delaware,
Inc. ("WHD"), a separate holding company for Williams' non-regulated businesses.
Effective July 31, 1999, WHD was merged into Williams and by operation of the
merger Williams assumed all assets, liabilities and obligations of WHD,
including without limitation ownership of WHD's Units. Effective August 11,
2000, Williams sold its Units to Quatro Finale IV LLC, a Delaware limited
liability company ("QFIV"), in a privately negotiated transaction. Williams has
agreed to hold the transferred Units as Nominee for QFIV. Williams retained the
voting rights and retained a "call" option on the transferred Units, and QFIV
was granted a "put" option on the Units. On June 6, 2003, the Trust received
notice of Williams' intent to exercise its "put" option to repurchase 2,408,791
Units in the Trust from QFIV. According to the notice, Williams exercised its
"put" option on June 13, 2003.

         Substantially all of the production attributable to the Underlying
Properties is from the Fruitland coal formation and constitutes "coal seam" gas
that would entitle the owners of such production to tax credits pursuant to
Section 29 of the Internal Revenue Code of 1986, as amended (the "Code"), if (i)
Congress extends the Section 29 credit past 2002, (ii) such extension applies to
coal seam gas production attributable to the Underlying Properties, and (iii)
certain other requirements are satisfied. See Note 3 to these financial
statements for further discussion of the extension of the Section 29 credit.


                                       8
<PAGE>


         Effective May 1, 1997, WPC transferred the Underlying Properties,
subject to and burdened by the Royalty Interests, to Quatro Finale LLC, a
non-affiliated Delaware limited liability company ("Quatro Finale"). Ownership
of the Underlying Properties reverted back to WPC effective February 1, 2001,
under the terms of the May 1, 1997 transaction. Pursuant to a Purchase and Sale
Agreement dated March 14, 2001 (the "2001 Transaction Agreement"), and effective
March 1, 2001, WPC sold the Underlying Properties subject to and burdened by the
Royalty Interests to Quatro Finale V LLC, a non-affiliated Delaware limited
liability company. On June 3, 2003, the Trust received notice from WPC of its
exercise of the right to repurchase interests in the Underlying Properties from
Quatro Finale V LLC pursuant to the 2001 Transaction Agreement. According to the
notice, the acquisition of the Underlying Properties closed May 8, 2003, upon
WPC's execution of the Assignment and Bill of Sale, and the transaction has an
effective date of January 1, 2003.

         The Trustee has the power to collect and distribute the proceeds
received by the Trust and to pay Trust liabilities and expenses. The Delaware
Trustee has only such powers as are set forth in the Trust Agreement and is not
empowered to otherwise manage or take part in the business of the Trust. The
Royalty Interests are passive in nature and neither the Delaware Trustee nor the
Trustee has any control over or any responsibility relating to the operation of
the Underlying Properties.

         The Trust will terminate no later than December 31, 2012, subject to
earlier termination under certain circumstances described in the Trust Agreement
(the "Termination Date") and summarized in the 2002 Annual Report under "Item 1
Business-Description of the Trust-Termination and Liquidation of the Trust."
Cancellation of the Trust will occur on or following the Termination Date when
all Trust assets have been sold and the net proceeds therefrom distributed to
Unitholders.

         The only assets of the Trust, other than cash and cash equivalents
being held for the payment of expenses and liabilities and for distribution to
Unitholders, are the Royalty Interests. The Royalty Interests consist primarily
of a net profits interest (the "NPI") in the Underlying Properties. The NPI
generally entitles the Trust to receive 60 percent of the NPI Net Proceeds, as
defined below, attributable to (i) gas produced and sold from WPC's net revenue
interests (working interests less lease burdens) in the properties in which WPC
has a working interest (the "WI Properties") and (ii) the revenue stream
received by WPC attributable to its 35 percent NPI in 5,348 gross acres in La
Plata County, Colorado (the "Farmout Properties"). The Royalty Interests also
include a 20 percent interest in WPC's Infill Net Proceeds, as defined below,
from the sale of production if well spacing rules are effectively modified and
additional wells are drilled on producing drilling blocks on the WI Properties
(the "Infill Wells") during the term of the Trust. To date, forty-three Infill
Wells have been drilled and twenty-one producing. The current status of the
Infill Wells reflects the Infill Net Profit Costs exceeding the Infill Net
Profit Gross Proceeds. The Trust will not be liable for such excess costs, and
such excess costs will hereafter constitute Excess Infill Net Profit Costs until
recovered by WPC. "NPI Net Proceeds" consists generally of the revenue stream
received by WPC from its 35 percent net profits interest in the Farmout
Properties, plus the aggregate proceeds attributable to WPC's net revenue
interest, based on the price paid at or in the vicinity of the wellhead (the
"Wellhead"), of gas produced from the WI Properties, less WPC's share of certain
taxes and costs. "Infill Net Proceeds" consists generally of the aggregate
proceeds, based on the price at the Wellhead, of gas produced


                                       9
<PAGE>


from WPC's net revenue interest in any Infill Wells less certain taxes and
costs. The complete definitions of NPI Net Proceeds and Infill Net Proceeds are
set forth in the Conveyance.

2. BASIS OF ACCOUNTING

         The financial statements of the Trust are prepared on a modified cash
basis and are not intended to present financial position and results of
operations in conformity with accounting principles generally accepted in the
United States ("GAAP"). Preparation of the Trust's financial statements on such
basis includes the following:

         Revenues are recognized in the period in which amounts are received by
the Trust. General and administrative expenses are recognized on an accrual
basis.

         Amortization of the Royalty Interests is calculated on a
unit-of-production basis and charged directly to trust corpus.

         Loss contingencies are recognized in the period in which amounts are
paid by the Trust.

         Distributions to Unitholders are recorded when declared by the Trustee
(See Note 4).

         The financial statements of the Trust differ from financial statements
prepared in accordance with GAAP because royalty income is not accrued in the
period of production, amortization of the Royalty Interests is not charged
against operating results, and loss contingencies are not charged to operating
results until paid.

3. FEDERAL INCOME TAXES

         The Trust is a grantor trust for Federal income tax purposes. As a
grantor trust, the Trust will not be required to pay Federal income taxes.
Accordingly, no provision for income taxes has been made in these financial
statements.

         Because the Trust will be treated as a grantor trust, and because a
Unitholder will be treated as directly owning an interest in the Royalty
Interests, each Unitholder will be taxed directly on his per Unit pro rata share
of income attributable to the Royalty Interests consistent with the Unitholder's
method of accounting and without regard to the taxable year or accounting method
employed by the Trust.

         Production from the coal seam gas wells drilled after December 31, 1979
and prior to January 1, 1993, qualified for the Federal income tax credit for
producing nonconventional fuels under Section 29 of the Code. This tax credit
was calculated annually based on each year's qualified production through the
year 2002. Williams provides the Trustee with Section 29 credit information
related to the Underlying Properties. Coal seam gas produced and sold after
December 31, 2002, no longer generates a Section 29 credit unless the
applicability of the Section 29 credit is extended by Congress. Legislation
currently is proposed to extend the Section 29 credit. Most of the proposed
bills would apply only prospectively. Moreover, a bill that is in conference as
of the date of this


                                       10
<PAGE>


filing extends the Section 29 credit only for qualified fuels produced from a
well or facility that was drilled or placed in service after the effective date
of the legislation. Therefore, any extension of the Section 29 credit appears at
this time unlikely to apply to coal seam gas attributable to the Underlying
Properties.

         The Section 29 credit was based on the Unitholder's pro rata share of
qualifying production. It can be used only to the extent that a Unitholder's
regular tax liability exceeds the Unitholder's tentative minimum tax liability
after the regular tax liability has been reduced by the foreign tax credit and
certain nonrefundable personal credits. Any part of the Section 29 credit not
allowed for the tax year solely because of this alternative minimum tax
limitation was subject to certain carryover provisions relating to the
alternative minimum tax calculation. Except for the foregoing, there are no Code
provisions that allow for the carryback or carryforward of Section 29 credits in
any other circumstances. As the carryforward of unused Section 29 credits is
related to the alternative minimum tax calculation for succeeding years,
carryforwards should be allowed even if the Section 29 credit is not extended
after 2002.

         It is unclear at this time whether Unitholders will be entitled to the
Section 29 credit on distributions received in the first quarter of 2003 that
were attributable to coal seam gas produced and sold in the fourth quarter of
2002. The estimated Section 29 credit, if allowed on such distributions, equals
$0.20 per Unit. The Trustee is seeking a private letter ruling from the Internal
Revenue Service (the "IRS") on this issue.

         Each Unitholder should consult his tax adviser regarding Trust tax
compliance matters.

4. DISTRIBUTIONS TO UNITHOLDERS

         The Trustee determines for each quarter the amount of cash available
for distribution to Unitholders. Such amount (the "Quarterly Distribution
Amount") is an amount equal to the excess, if any, of the cash received by the
Trust, on or prior to the last day of the month following the end of each
calendar quarter from the Royalty Interests, plus, with certain exceptions, any
other cash receipts of the Trust during such quarter, over the liabilities of
the Trust paid during such quarter, subject to adjustments for changes made by
the Trustee during such quarter in any cash reserves established for the payment
of contingent or future obligations of the Trust.

         The Trustee distributes the Quarterly Distribution Amount within 60
days after the end of each calendar quarter to each person who was a Unitholder
of record on the associated record (i.e. the 45th day following the end of each
calendar quarter or if such day is not a business day, the next business day
thereafter), together with interest estimated to be earned on such amount from
the date of receipt thereof by the Trustee to the payment date.

         In addition to the regular quarterly distributions, under certain
circumstances specified in the Trust Agreement (such as upon a purchase price
adjustment, if any, or pursuant to the sale of a Royalty Interest), the Trust
would make a special distribution (a "Special Distribution Amount"). A Special
Distribution Amount would be made when amounts received by the Trust under such
circumstances aggregated in excess of $9,000,000. The record date for a Special
Distribution


                                       11
<PAGE>


Amount will be the 15th day following receipt of amounts aggregating a Special
Distribution Amount by the Trust (unless such day is not a business day in which
case the record date will be the next business day thereafter) unless such day
is within 10 days of the record date for a Quarterly Distribution Amount in
which case the record date will be the date as is established for the next
Quarterly Distribution Amount. Distribution to Unitholders of a Special
Distribution Amount will be made no later than 15 days after the Special
Distribution Amount record date.

5. SUBSEQUENT EVENTS

         Subsequent to September 30, 2003, the Trust declared the following
distribution:

<Table>
<Caption>
                 Quarterly
                  Record                Payment           Distribution
                   Date                   Date              per Unit
                 ---------              --------          ------------
<S>                                <C>                    <C>
             November 14, 2003     November 28, 2003        $.441042
</Table>

         The distribution per unit increased from $.415848 attributable to the
second quarter of 2003 and paid in the third quarter of 2003 to $.441042
attributable to the third quarter of 2003 and paid in the fourth quarter of
2003. The increase in distributions was mainly due to an increase in natural gas
prices compared to the previous quarter.

6. CONTINGENCIES

         WPX Gas Resources Company ("WPX Gas Resources," as successor in
interest to Williams Gas Marketing Company), purchases natural gas produced from
the WI Properties (except for certain small volumes) at the Wellhead under the
terms of a gas purchase contract dated October 1, 1992, as amended (the "Gas
Purchase Contract"). The Gas Purchase Contract provides for a pricing mechanism
during an initial 5 year period, which expired on December 31, 1997, and
continuing for one or more consecutive additional 1 year terms unless and until
WPX Gas Resources exercises its annual option, exercisable 15 days prior to the
end of each contract year, to discontinue purchasing gas under the pricing
mechanism of the Gas Purchase Contract and instead purchase gas at a monthly
market base price. WPX Gas Resources has not exercised this option and therefore
the pricing mechanism will continue to remain in effect through at least
December 31, 2003.

         Under the pricing mechanism of the Gas Purchase Contract, when the
market price is less than $1.70 per MMBtu (the "Minimum Purchase Price"), the
Trust will be paid the Minimum Purchase Price for the gas and an account (the
"Price Credit Account") will be maintained to identify the accrued and
unrecouped amount of payments made to the Trust in excess of the market price.
Any amounts in the Price Credit Account are subject to future recoupment when
the market price exceeds the Minimum Purchase Price. As of September 30, 2003,
there were no remaining unrecouped price credits in the Price Credit Account. To
the extent there may in the future be a balance in the Price Credit Account, the
entitlement to recoup price credits means that if and when the index price is
above the Minimum Purchase Price, future royalty income paid to the Trust would


                                       12
<PAGE>


be reduced until such time as such Price Credit Account is once again reduced to
zero. Corresponding cash distributions to Unitholders would also be reduced.

         While the terms of the Gas Purchase Agreement pricing mechanism remain
in place and no balance exists in the Price Credit Account, when the market
price for natural gas exceeds $1.94 price per MMBtu, the Trust receives only 50
percent of the excess of the market price over the $1.94 price per MMBtu. For
production months in the second quarter of 2003, which are reported as Royalty
Income in the third quarter 2003, the index price remained above the Minimum
Purchase Price.

         The majority of the production attributable to the Trust is within
Federal units. Unit participating areas are formed by pooling production from
the participating area. Entitlement to the pooled production is based on each
party's acreage in the participating area divided by the total participating
acreage. Wells drilled outside the participating area may create an enlargement
to the participating area and a revision of the Unit ownership entitlement. The
Bureau of Land Management ("BLM") must approve Unit participating area
expansions. The effective date for Unit expansions is retroactive to the date
the well creating the expansion was tested. For fourth quarter 2002 natural gas
production, retroactive adjustments were processed on two of the Federal Units.
The first adjustment was related to the Federal Unit expansion of the San Juan
30-5 Unit. The second adjustment was not related to a Federal Unit expansion,
rather it resulted from a payout adjustment on certain wells in the San Juan
32-9 Unit, whereby the working interest supporting the NPI of the Underlying
Properties was reduced. The total impact of these adjustments was to reduce the
natural gas attributable to the NPI of the Underlying Properties by
approximately 500,000 MMbtu's and that of the Trust by approximately 300,000
MMbtu's (representing a retroactive adjustment based on actual prices in effect
during the production period of approximately $357,000). The revenues presented
in the accompanying statements of distributable income are on an entitlement
basis and reflect the most recent BLM participating area approvals at June 30,
2003 and 2002, respectively. There are pending or anticipated applications or
approvals for additional participating area enlargements. WPC has advised the
Trustee that it does not believe that final approval of these Unit participating
area enlargements and the resulting retroactive adjustments, if any, will have a
material impact on the revenues as presented in these financial statements.

         The Trustee has been advised by WPC that the Minerals Management
Service ("MMS"), a subagency of the U.S. Department of the Interior, has from
time to time considered the inclusion of the value of the Section 29 tax credits
attributable to coal seam gas production in the calculation of gross proceeds
for purposes of calculating the royalty that is payable to the MMS. On August
30, 1993, the U.S. Office of the Inspector General (the "OIG") issued an audit
report stating that Section 29 tax credits should be included in the calculation
of gross proceeds and recommending that the MMS pursue collection of additional
royalties with respect to past and future production. On December 8, 1993,
however, the Office of the Solicitor of the U.S. Department of the Interior gave
its opinion to the MMS that the report of the OIG was incorrect and that Section
29 tax credits are not part of gross proceeds for the purpose of Federal royalty
calculations. WPC believes that any such inclusion of the value of Section 29
tax credits for the purposes of calculating royalty payments required to be made
on Federal and Indian lands would be inappropriate since all mineral interest
owners, including royalty owners, are entitled to Section 29 tax credits for
their proportionate share of qualifying coal seam gas production (to the extent
that the Section 29 credit is available as discussed in Note 3 to these
financial statements). WPC has advised the Trustee that it would


                                       13
<PAGE>


vigorously oppose any attempt by the MMS to require the inclusion of the value
of Section 29 tax credits in the calculation of gross proceeds. However, if such
regulations were adopted and upheld, royalty payments to the Federal government
would be increased, which would decrease NPI Net Proceeds and, therefore, the
amounts payable to the Trust. The reduction in amounts payable to the Trust
would cause a corresponding reduction in associated Section 29 tax credits
available to Unitholders (to the extent that the Section 29 credit is available
as discussed in Note 3 to these financial statements).

         On January 5, 2001, the State of New Mexico, acting under authority of
the MMS, presented WPC with an Audit Issue Letter for the alleged underpayment
of royalties in the amount of $948,501, on gas produced from the Underlying
Properties due to federal royalty owners during the time period from January
1992 through December 1996. MMS regulations permit a lessee to deduct from its
gross proceeds its reasonable actual cost of transportation and processing to
transport the gas from the lease to the point of sale in calculating the market
value of its production. The State of New Mexico claims that certain costs of
removing and transporting carbon dioxide gas are not deductible. On March 22,
2001, WPC responded to the Audit Issue Letter and contested the State of New
Mexico's claim for additional royalties as being contrary to law. In early
November 2001, WPC received from the MMS an order to Report and Pay Additional
Royalties and Perform Restructured Accounting on subsequent periods. The order
was dated October 30, 2001. The order requires WPC to (1) pay additional
royalties of $943,964 on production related to the audit period of January 1,
1992 through December 31, 1996; (2) pay an estimated incremental royalty amount
of $991,549 for production covering January 1, 1997 through March 31, 2001; and
(3) perform a restructured accounting and pay any additional royalties for
months after March 2001. On January 30, 2002, WPC filed its Statement of Reasons
in support of its earlier appeal of the audit issue letter. While WPC has
informed the Trustee that it believes that its past computations have been
appropriately stated, applying the MMS methodology asserted by the State of New
Mexico could potentially result in negative adjustments to amounts previously
paid to the Trust of approximately $3,000,000.

Item 2. Trustee's Discussion and Analysis of Financial Condition and Results of
Operations.

         The Trust makes quarterly cash distributions to holders of units of
beneficial interest ("Units") in the Trust ("Unitholders"). The only assets of
the Trust, other than cash and cash equivalents being held for the payment of
expenses and liabilities and for distribution to Unitholders, are net profits
interests (the "Royalty Interests") in certain proved coal seam gas properties
located in the San Juan Basin of New Mexico and Colorado (the "Underlying
Properties"). The Royalty Interests owned by the Trust burden the Underlying
Properties, which are owned by WPC and not the Trust.

         Distributable income of the Trust consists of the excess of royalty
income plus interest income over the general and administrative expenses of the
Trust. Upon receipt by the Trust, royalty income is invested in short-term
investments in accordance with the Trust Agreement (as defined in Note 1 to the
financial statements of the Trust appearing elsewhere in this Form 10-Q) until
its subsequent distribution to Unitholders.


                                       14
<PAGE>


         The amount of distributable income of the Trust for any quarter may
differ from the amount of cash available for distribution to Unitholders in such
quarter due to differences in the treatment of the expenses of the Trust in the
determination of those amounts. The financial statements of the Trust are
prepared on a modified cash basis pursuant to which the expenses of the Trust
are recognized when incurred. Consequently, the reported distributable income of
the Trust for any quarter is determined by deducting from the income received by
the Trust the amount of expenses incurred by the Trust during such quarter. The
amount of cash available for distribution to Unitholders, however, is determined
in accordance with the provisions of the Trust Agreement and reflects the
deduction from the income actually received by the Trust of the amount of
expenses actually paid by the Trust and adjustments for changes in reserves for
unpaid liabilities. See Note 4 to the financial statements of the Trust
appearing elsewhere in this Form 10-Q for additional information regarding the
determination of the amount of cash available for distribution to Unitholders.

Three Months and Nine Months Ended September 30, 2003 Compared to Three Months
and Nine Months Ended September 30, 2002

         For the quarter ended September 30, 2003, royalty income received by
the Trust amounted to $4,191,222 as compared to $2,341,940 received for the same
quarter in 2002. The increase in royalty income is a result of significantly
higher natural gas prices in 2003 than in 2002. Production related to the
royalty income received by the Trust in the third quarter of 2003 was 2,052,170
MMBtu as compared to 1,861,380 MMBtu for the same quarter in 2002. Royalty
income for the nine months ended September 30, 2003 was $10,318,848 as compared
to $5,694,286 for the same period in 2002. Production related to the royalty
income received by the Trust for the nine months ended September 30, 2003 was
5,419,097 MMBtu as compared to 5,563,743 MMBtu for the nine months ended
September, 30, 2002. Production volumes for the nine months ended September 30,
2003 includes the first quarter 2003 300,000 MMBtu effect of the Federal Unit
expansion of the San Juan 30-5 Unit and a decrease in the working interests of
certain wells supporting the net profits interest of the San Juan 32-9 Unit, as
discussed in Note 6 of the financial statements. The effect of this was offset
by significantly higher natural gas prices compared to the previous year,
resulting in higher royalty income for the nine months ended September 30, 2003.
Interest income for the three and nine month periods ended September 30, 2003
were comparable to prior year. The increase in administrative expenses in the
third quarter of 2003 as compared to the third quarter of 2002 is due to costs
incurred to prepare and submit the private letter ruling request to the IRS on
the Section 29 credit timing issue.

         Distributable income for the quarter ended September 30, 2003 was
$4,028,072, or $.42 per Unit, compared to $2,225,828, or $.23 per Unit, for the
third quarter of 2002. A distribution of $.415848 per Unit was made on August
29, 2003 to Unitholders of record on August 14, 2003. Distributable income for
the nine months ended September 30, 2003 was $9,710,205, or $1.00 per Unit, as
compared to $5,162,747, or $.53 per Unit, for the same period in 2002. The
increase was the result of significantly higher natural gas prices in 2003 than
in 2002.

         Because the Trust incurs administrative expenses throughout a quarter
but receives its royalty income only once in a quarter, the Trustee established
in the first quarter of 1993 a cash reserve for


                                       15
<PAGE>


the payment of expenses and liabilities of the Trust. The Trustee thereafter has
adjusted the amount of such reserve in certain quarters as required for the
payment of the Trust's expenses and liabilities, in accordance with the
provisions of the Trust Agreement. The Trustee anticipates that it will maintain
for the foreseeable future a cash reserve which will fluctuate as expenses are
paid and royalty income is received.

         Royalty income to the Trust is attributable to the sale of depleting
assets. All of the Underlying Properties burdened by the Royalty Interests
consist of producing properties. Accordingly, the proved reserves attributable
to WPC's interest in the Underlying Properties are expected to decline
substantially during the term of the Trust and a portion of each cash
distribution made by the Trust will, therefore, be analogous to a return of
capital. Accordingly, cash yields attributable to the Units are expected to
decline over the term of the Trust.

         Royalty income received by the Trust in a given calendar quarter will
generally reflect the sum of (i) proceeds from the sale of gas produced from the
WI Properties during the preceding calendar quarter, plus (ii) cash received by
WPC with respect to the Farmout Properties either (a) during the preceding
calendar quarter or (b) if received in sufficient time to be paid to the Trust,
in the month immediately following such calendar quarter. Accordingly, the
royalty income included in distributable income for the quarter ended September
30, 2003, was based on production volumes and natural gas prices for the period
April 2003 through June 2003, as shown in the table below. Due to delays
associated with the receipt of income related to the Farmout Properties, the
Trust's royalty income for the third quarter of 2003 reflects estimated
production volumes from the Farmout Properties for the months of March 2003
through May 2003, as shown in the table below. The production volumes included
in the table below are for production attributable to net profits of the
Underlying Properties, and not for production attributable to the Trust's
Royalty Interests.

<Table>
<Caption>
                                         Three Months         Three Months
                                             Ended                Ended
                                         June 30, 2003        June 30, 2002
                                         -------------        -------------
<S>                                      <C>                  <C>
Production (MMBtu) (1)
    WI Properties                            4,147,234(2)         4,815,947(4)
    Farmout Properties                         884,321(3)           603,441(5)

Blanco Hub Spot Price
    ($/MMBtu) (6)                        $        4.26        $        2.60
Net Wellhead Price
    WI Properties ($/MMBtu) (6)          $        2.06        $        1.19
</Table>

----------
(1) Million British Thermal Units.
(2) Includes retroactive adjustments of 29,550 MMBtu.
(3) Reflects estimated volumes for March 2003 through May 2003.
(4) Includes retroactive adjustments of 87,049 MMBtu.
(5) Reflects estimated volumes for March 2002 through May 2002.
(6) Simple average of estimates for the months included in the period presented.


                                       16
<PAGE>


         Production from the WI Properties is generally sold by WPC to WPX Gas
Resources pursuant to the Gas Purchase Contract that provides certain
protections for WPC and Unitholders by providing that WPX Gas Resources will
purchase gas from WPC at a minimum purchase price of $1.70 even when the
applicable index price (which is equal to 97% of the Blanco Hub Spot Price)
falls below $1.70 per MMBtu, provided that WPX Gas Resources is entitled to
accrue price credits in the amount of any excess of the minimum price so paid
over the applicable index price. When the applicable index price exceeds $1.70
per MMBtu, WPX Gas Resources is entitled to recoup any price credits previously
accrued. When the applicable index price is greater than $1.94 per MMBtu, the
Gas Purchase Contract protects and benefits WPX Gas Resources by allowing it to
purchase gas from WPC at a contract price equal to $1.94 per MMBtu plus only 50
percent of the difference between the applicable index price and $1.94 per
MMBtu. The Gas Purchase Contract also provides that the price paid for gas by
WPX Gas Resources is reduced by the amount of gathering, processing and certain
other costs paid by WPX Gas Resources. See "Item 2 -- The Royalty Interests --
Gas Purchase Contract" in the 2002 Annual Report for detailed information about
the Gas Purchase Contract and its impact on Trust income.

         The initial five-year term of the pricing provision ("Primary Term") of
the Gas Purchase Contract expired on December 31, 1997. Following the expiration
of the Primary Term, the pricing provision will continue in effect for one or
more consecutive additional one-year terms (each such term a "Contract Year")
unless and until WPX Gas Resources exercises its annual option, exercisable 15
days prior to the end of each Contract Year, to discontinue purchasing gas from
WPC under the pricing provision of the Gas Purchase Contract and instead
purchase gas at a monthly price equal to the index price of 97 percent of the
Blanco Hub Spot Price. WPX has not yet exercised this option and the pricing
mechanism of the Primary Term therefore has been and will continue to remain in
effect through at least December 31, 2003.

         For the nine months ended September 30, 2003, which is based on
production volumes and natural gas prices for the nine months ended June 30,
2003, the Blanco Hub Spot Price was above $2.00 per MMBtu, and therefore the
applicable index price under the Gas Purchase Contract, which is equal to 97% of
the Blanco Hub Spot Price, was above $1.94 per MMBtu through such periods. In
general, under the Gas Purchase Contract, the Trust only receives the benefit of
50 percent of any amount by which the applicable index price exceeds $1.94 per
MMBtu. Consequently, pursuant to the terms of the Gas Purchase Contract, WPX Gas
Resources paid WPC an amount for gas purchased equal to $1.94 per MMBtu, less
the costs paid by WPX Gas Resources to gather and process such gas and deliver
it to specified delivery points plus 50 percent of the excess of the applicable
index price over $1.94 per MMBtu. The Blanco Hub Spot Price remained above $2.00
per MMBtu in October 2003.

         The information in this Form 10-Q concerning production and prices
relating to the Underlying Properties is based on information prepared and
furnished by WPC to the Trustee. The Trustee has no control over and no
responsibility relating to the operation of the Underlying Properties.


                                       17
<PAGE>


Forward-Looking Statements

         This report on Form 10-Q includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical fact included in this Form 10-Q, including,
without limitation, statements contained in this "Trustee's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the Trust's
financial position and industry conditions, are forward-looking statements.
Although the Trustee believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

         The only assets of and sources of income to the Trust are the Royalty
Interests, which generally entitle the Trust to receive a share of the net
profits from natural gas production from the Underlying Properties.
Consequently, the Trust's financial results can be significantly affected by
fluctuations in natural gas prices and the Trust has commodity price risk
exposure associated with the natural gas markets in the United States. The
Royalty Interests do not entitle the Trust to control or influence the operation
of the Underlying Properties or the sale of gas produced therefrom. Natural gas
produced from the WI Properties, which comprises the majority of production
attributable to the Royalty Interests, is currently sold by WPC pursuant to the
terms of the Gas Purchase Contract. Although the Trust is not a party to the Gas
Purchase Contract, the Gas Purchase Contract may significantly impact revenues
to the Trust. Although the Gas Purchase Contract mitigates the risk to the Trust
of low gas prices, it also limits the ability of the Trust to benefit from the
effects of higher gas prices. See "Item 2 -- The Royalty Interests -- Gas
Purchase Contract" in the 2002 Annual Report for detailed information about the
Gas Purchase Contract and its impact on the Trust and Unitholders.

         Other than the Trust's ability to periodically borrow money as
necessary to pay expenses, liabilities and obligations of the Trust that cannot
be paid out of cash held by the Trust, the Trust is prohibited from engaging in
borrowing transactions. The amount of any such borrowings is unlikely to be
material to the Trust. The Trust periodically holds short-term investments
acquired with funds held by the Trust pending distribution to Unitholders and
funds held in reserve for the payment of Trust expenses and liabilities. Because
of the short-term nature of these borrowings and investments and certain
limitations upon the types of such investments which may be held by the Trust,
the Trustee believes that the Trust is not subject to any material interest rate
risk. The Trust does not engage in transactions in foreign currencies which
could expose the Trust or Unitholders to any foreign currency related market
risk.

Item 4. Controls and Procedures.

         As of the end of the period covered by this report, the Trustee carried
out an evaluation of the effectiveness of the design and operation of the
Trust's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15
and 15d-15. Based upon that evaluation, the Trustee concluded that the Trust's
disclosure controls and procedures are effective in timely alerting the


                                       18
<PAGE>


Trustee to material information relating to the Trust required to be included in
the Trust's periodic filings with the Securities and Exchange Commission. In its
evaluation of disclosure controls and procedures, the Trustee has relied, to the
extent considered reasonable, on information provided by WPC. There has not been
any change in the Trust's internal control over financial reporting during the
period covered by this report that has materially affected, or is reasonably
likely to materially affect, the Trust's internal control over financial
reporting.


                           PART II - OTHER INFORMATION

Items 1 through 5.

         Not applicable.

Item 6. Exhibits and Reports on Form 8-K.

         (a) The exhibits listed below are filed as part of this report:

<Table>
<Caption>
         EXHIBIT
         NUMBER   EXHIBIT
         ------   -------
<S>               <C>
         15 --    Letter regarding unaudited interim financial information dated
                  November 10, 2003, from the independent accountant which
                  acknowledges awareness of the use in registration statement of
                  a report on unaudited interim financial information.

         31.1 --  Certification by Ron E. Hooper, Senior Vice President and
                  Administrator of Bank of America, Trustee of Williams Coal
                  Seam Gas Royalty Trust, dated November 13, 2003,and submitted
                  pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

         32.1 --  Certificate by Bank of America, Trustee of Williams Coal Seam
                  Gas Royalty Trust, dated November 13, 2003,and submitted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
                  U.S.C. Section 1350).
</Table>

         (b) Reports on Form 8-K.

         The Trust did not file any reports on Form 8-K during the third quarter
         of 2003; however, the following report on Form 8-K was "furnished" to
         the SEC during the third quarter:

                  On August 8, 2003, the Company furnished a report on Form 8-K
                  indicating that the Company issued a press release announcing
                  its quarterly cash distribution to unitholders of record on
                  August 14, 2003.


                                       19
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                     WILLIAMS COAL SEAM GAS ROYALTY TRUST

                                     By: BANK OF AMERICA, N.A., Trustee



                                     By: /s/ RON E. HOOPER
                                         -------------------------
                                         Ron E. Hooper
                                         Senior Vice President and Administrator


              (The Trust has no directors or executive officers.)


Date: November 13, 2003


                                       20
<PAGE>


                                INDEX TO EXHIBITS


<Table>
<Caption>
EXHIBIT NUMBER    EXHIBIT
--------------    -------
<S>               <C>
15 --             Letter regarding unaudited interim financial information dated
                  November 10, 2003, from the independent accountant which
                  acknowledges awareness of the use in registration statement of
                  a report on unaudited interim financial information.

31.1 --           Certification by Ron E. Hooper, Senior Vice President and
                  Administrator of Bank of America, Trustee of Williams Coal
                  Seam Gas Royalty Trust, dated November 13, 2003,and submitted
                  pursuant to Rule 13a- 14(a)/15d-14(a) and pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

32.1 --           Certificate by Bank of America, Trustee of Williams Coal Seam
                  Gas Royalty Trust, dated November 13, 2003, and submitted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18
                  U.S.C. Section 1350).
</Table>


                                       21