<PAGE>   1
                                  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 March 31, 2000
                                                 --------------

                                       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
                                             ---   ---

     Number of units of beneficial interest outstanding at May 12, 2000:
9,700,000.


<PAGE>   2


                         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 incorporated by reference in the
Trust's Annual Report on Form 10-K for the year ended December 31, 1999 (the
"1999 Annual Report"). The December 31, 1999 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 March
31, 2000, and the distributable income and the changes in trust corpus for the
three-month periods ended March 31, 2000 and 1999, 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 March 31, 2000 and for the three-month
periods ended March 31, 2000 and 1999 included herein have been reviewed by
Ernst & Young LLP, independent public accountants, as stated in their report
appearing herein.


                                       2
<PAGE>   3


                     Independent Accountants' Review Report

Bank of America, N.A.
  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 March 31, 2000,
and the related condensed statements of distributable income and changes in
trust corpus for the three-month periods ended March 31, 2000 and 1999. 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, 1999, 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,
2000, 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, 1999, 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
May 12, 2000


                                       3
<PAGE>   4


WILLIAMS COAL SEAM GAS ROYALTY TRUST

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


<TABLE>
<CAPTION>
                                      March 31,   December 31,
ASSETS                                  2000          1999
                                    -----------   -----------
<S>                                 <C>           <C>
Current Assets -
        cash and cash equivalents   $     6,813   $   104,693
Royalty interests in oil
        and gas properties
        (less accumulated
        amortization of
        $100,920,881 at
        March 31, 2000
        and $98,399,040 at
        December 31, 1999)           37,645,782    40,167,623
                                    -----------   -----------

TOTAL ASSETS                        $37,652,595   $40,272,316
                                    ===========   ===========


LIABILITIES AND TRUST CORPUS

Current Liabilities -
        trust expenses payable      $   145,132   $    73,589


Trust corpus -
        9,700,000 units of
        beneficial interest
        authorized and
        outstanding                  37,507,463    40,198,727
                                    -----------   -----------

TOTAL LIABILITIES
        AND TRUST CORPUS            $37,652,595   $40,272,316
                                    ===========   ===========
</TABLE>


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


                                       4
<PAGE>   5


WILLIAMS COAL SEAM GAS ROYALTY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)


<TABLE>
<CAPTION>
                              THREE MONTHS       THREE MONTHS
                                  ENDED              ENDED
                             March 31, 2000     March 31, 1999
                             ---------------    ---------------
<S>                          <C>                <C>
Royalty income               $     3,927,382    $     4,110,785
Interest income                       15,327             13,401
                             ---------------    ---------------
                                   3,942,709          4,124,186

General and administrative
        expenses                    (204,428)          (167,835)
                             ---------------    ---------------
Distributable income         $     3,738,281    $     3,956,351
                             ===============    ===============

Distributable income
        per unit
        (9,700,000 units)    $           .39    $           .41
                             ===============    ===============
</TABLE>


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


                                       5
<PAGE>   6


WILLIAMS COAL SEAM GAS ROYALTY TRUST

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)


<TABLE>
<CAPTION>
                                THREE MONTHS      THREE MONTHS
                                    ENDED            ENDED
                               March 31, 2000    March 31, 1999
                               --------------    --------------
<S>                            <C>               <C>
Trust corpus,
        beginning of period    $   40,198,727    $   49,769,352
Amortization of royalty
        interests                  (2,521,841)       (3,225,498)
Distributable income                3,738,281         3,956,351
Distributions to unitholders       (3,907,704)       (3,984,187)
                               --------------    --------------


Trust corpus, end
        of period              $   37,507,463    $   46,516,019
                               ==============    ==============

Distributions per unit
        (9,700,000 units)      $          .40    $          .41
                               ==============    ==============
</TABLE>


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


                                       6
<PAGE>   7


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 of Texas, 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 6,131,209 Units to the public through various underwriters in
January and February 1993 (the "Public Offering"). 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. Substantially all of the
production attributable to the Underlying Properties is from the Fruitland coal
formation and constitutes "coal seam" gas that entitles the owners of such
production, provided certain requirements are met, to tax credits for Federal
income tax purposes pursuant to Section 29 of the Internal Revenue Code of 1986,
as amended. 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").

     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"). Cancellation of the Trust will occur on or following
the Termination Date when all Trust assets have been sold and the net proceeds
thereof distributed to Unitholders.


                                       7
<PAGE>   8


     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 81 percent of the NPI Net Proceeds, as
defined below, attributable to (i) gas produced and sold from Quatro Finale's
net revenue interests (working interests less lease burdens) in the properties
in which Quatro Finale has a working interest (the "WI Properties") and (ii) the
revenue stream received by Quatro Finale attributable to its 35 percent net
profits interest in 5,348 gross acres in La Plata County, Colorado (the "Farmout
Properties"). The Royalty Interests also include a 20 percent interest in Quatro
Finale'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. No Infill Wells have been drilled on the WI Properties to
date. "NPI Net Proceeds" consists generally of the revenue stream received by
Quatro Finale from its 35 percent net profits interest in the Farmout
Properties, plus the aggregate proceeds attributable to Quatro Finale'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 Quatro Finale'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 from
Quatro Finale's net revenue interest in any Infill Wells less certain taxes and
costs. The NPI percentage is subject to certain future downward adjustments
based on a rate of return computation once cumulative aggregate production
targets are met. Based on current estimates, a downward adjustment to the NPI is
expected during the first quarter of year 2001. 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 generally accepted accounting principles ("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.

     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 and amortization of the Royalty Interests is not charged
against operating results.

     Williams sold an aggregate of 5,980,000 Units of the Trust's authorized
9,700,000 Units in the Public Offering at the offering price of $20 per Unit,
retaining 3,720,000 Units. Subsequently, Williams sold an additional 151,209
Units for $23.50 per Unit. Accordingly, the condensed statements of assets,
liabilities and trust corpus reflect the sale of these Units at the respective
sale


                                       8
<PAGE>   9


prices thereof, as well as the remaining 3,568,791 Units at Williams' historical
cost. During the second quarter of 1995 Williams transferred its Units to 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. If Williams, in the future, should sell all
or a portion of its retained Units, at that time, the carrying value on the
Trust's statements of assets, liabilities and trust corpus may again be adjusted
from Williams's historical cost to the subsequent sale price with respect to the
Units sold.

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 or state 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 coal seam gas wells drilled after December 31, 1979 and
prior to January 1, 1993, qualifies for the Federal income tax credit for
producing nonconventional fuels under Section 29 of the Internal Revenue Code.
This tax credit is calculated annually based on each year's qualified production
through the year 2002. Such credit, based on the Unitholder's pro rata share of
qualifying production, may not reduce his regular tax liability (after the
foreign tax credit and certain other non-refundable credits) below his
alternative minimum tax. Any part of the Section 29 credit not allowed for the
tax year solely because of this limitation is subject to certain carryover
provisions. Each Unitholder should consult his tax advisor 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 Quarterly Distribution Amount for each quarter is payable to
Unitholders of record on the 45th day following the end of such calendar quarter
unless such day is not a business day in which case the record date is the next
business day thereafter. 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 date, together with interest
estimated to be earned on such amount from the date of receipt thereof by the
Trustee to the payment date.


                                       9
<PAGE>   10


     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 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 March 31, 2000, the Trust declared the following
distribution:

<TABLE>
<CAPTION>
        Quarterly
         Record               Payment          Distribution
          Date                 Date              per Unit
        ---------             -------          ------------
<S>                        <C>                 <C>
      May 15, 2000         May 30, 2000          $.305708
</TABLE>

     The distribution per unit decreased from $.402856 in the first quarter of
2000 to $.305708 in the second quarter of 2000. The decrease in distributions
was mainly the result of decreased production.

6.   CONTINGENCIES

     Under the terms of the gas purchase contract entered into by WPC and WPX
Gas Resources Company ("WPX Gas Resources") (formerly known as WFS Gas
Resources, as successor to Williams Gas Marketing Company), as amended (the "Gas
Purchase Contract"), additional revenues may be paid to the Trust to meet the
Minimum Purchase Price provision of 97 percent of $1.75 per MMBtu. This
additional revenue is subject to recoupment by the purchaser from future
revenues received from production commencing after January 1, 1994 when the
applicable index price exceeds the Minimum Purchase Price as long as the Minimum
Purchase Price commitment is in effect. Pursuant to the terms of the Gas
Purchase Contract, a price credit account was established for the purpose of
accounting for such recoupments. The primary term of the Gas Purchase Contract
expired on December 31, 1997, after which time WPX Gas Resources has had the
annual option, exercisable 15 days prior to the end of each contract year, to
discontinue paying the Minimum Purchase Price by giving notice of its election
to pay solely on an index price. For each of the contract years 1998, 1999 and
2000, WPX Gas Resources did not exercise this option and the pricing mechanism
of the primary term has and will continue to remain in effect through at least
December 31, 2000.


                                       10
<PAGE>   11
     During the first quarter of 2000, the applicable index price was above the
Minimum Purchase Price resulting in recoupments against the outstanding balance
of the price credit account established under the Gas Purchase Contract. WPC
estimates that, as of March 31, 2000, WPX Gas Resources had aggregate price
credits in the price credit account of approximately $3.2 million of which the
Trust's 81 percent interest in Quatro Finale's interest in the WI Properties,
represents a potential offset of $2.6 million against future royalty income
otherwise payable to the Trust. The applicable index price was above the Minimum
Purchase Price in April 2000.

     The entitlement of WPX Gas Resources to recoup the price credits means that
if and when the applicable Blanco Hub Spot Price rises above $1.75 per MMBtu,
future royalty income otherwise payable to the Trust would be reduced until such
time as such price credits have been fully recouped. Corresponding cash
distributions to Unitholders would also be reduced.

     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. 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 March 31, 2000 and
1999, 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 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 MSS 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. WPC has advised the Trustee that it would 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 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.

     The Trustee has also been informed by WPC that the MMS has informed some
San Juan Basin natural gas producers that they have incorrectly deducted
certain costs in the producers' coal bed methane valuations in determining the
amounts due to Federal royalty owners. While WPC believes that its past
computations have been appropriately stated, applying the MMS methodology could
potentially result in material negative adjustments to amounts previously paid
to the Trust.

7.   EXPECTED NPI PERCENTAGE CHANGE

     The NPI generally entitles the Trust to receive 81 percent of the NPI Net
Proceeds. However, at the point that cumulative production from the Underlying
Properties exceeds 178.5 Bcf of gas and the internal rate of return of the
"after tax cash flow per Trust Unit" (as defined in the Conveyance) is equal to
or greater than 12 percent but not more than 14 percent, the percentage of NPI
Net Proceeds payable in respect of the NPI would be reduced to 60 percent. If
such level of production is exceeded and such internal rate of return of the
after tax cash flow per Trust Unit exceeds 14 percent, the percentage of NPI Net
Proceeds payable in respect of the NPI would be reduced to 40 percent. WPC has
advised the Trustee that the cumulative production from the Underlying
Properties to date has exceeded 178.5 Bcf. Based upon projections by Miller and
Lents, Ltd., the Trust's independent petroleum engineers, the internal rate of
return is not currently expected to be 12 percent or higher until the first
quarter of 2001, although no assurance can be made that it will not occur sooner
than projected.

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 Quatro Finale 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.


                                       11
<PAGE>   12


     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 Ended March 31, 2000 Compared to Three Months Ended March 31, 1999

     For the quarter ended March 31, 2000, royalty income received by the Trust
amounted to $3,927,382 as compared to $4,110,785 received for the same quarter
in 1999. The decrease in royalty income is primarily due to decreased
production. Production related to the royalty income received by the Trust in
the first quarter of 2000 was 3,577,711 MMBtu as compared to 4,031,239 MMBtu for
the same quarter in 1999. Interest income for the quarter ended March 31, 2000
was $15,327 compared to $13,401 for the same quarter in 1999. General and
administrative expenses during the first quarter of 2000 amounted to $204,428
compared to $167,835 for the same quarter in 1999.

     Distributable income for the quarter ended March 31, 2000 was $3,738,281 or
$.39 per Unit compared to $3,956,351 or $.41 per Unit for the first quarter of
1999. This decrease was the result of decreased production. A distribution of
$.402856 per Unit was made on February 29, 2000 to Unitholders of record on
February 14, 2000.

     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 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


                                       12
<PAGE>   13


calendar quarter, plus (ii) cash received by Quatro Finale 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 March 31, 2000 was based on
production volumes and natural gas prices for the period October 1999 through
December 1999, 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 first quarter of 2000 reflects estimated production volumes from the
Farmout Properties for the months of September 1999 through November 1999, as
shown in the table below. The production volumes included in the table below are
for production attributable to the Underlying Properties, and not for production
attributable to the Trust's Royalty Interests and are net of the amount of
production attributable to Quatro Finale's royalty obligations to third parties,
which is determined by contractual arrangement with such parties.

<TABLE>
<CAPTION>
                                      Three Months        Three Months
                                         Ended               Ended
                                   December 31, 1999   December 31, 1998
                                   -----------------   -----------------
<S>                                <C>                 <C>
Production (MMBtu)(1)
     WI Properties                    3,640,386(2)       3,854,235(4)
     Farmout Properties                 776,542(3)       1,122,603(5)

Blanco Hub Spot Price
     ($/MMBtu)(6)                    $     2.43         $     1.84
Net Wellhead Price
     WI Properties ($/MMBtu)(6)      $      .98         $      .94
</TABLE>

-----------------------
(1)  Million British Thermal Units.
(2)  Includes prior period adjustments of 67,046 MMBtu.
(3)  Reflects estimated volumes for September 1999 through November 1999.
(4)  Includes prior period adjustments of 295,001 MMBtu.
(5)  Reflects actual volumes for September 1998 through November 1998.
(6)  Simple average of the months included in the period presented.

     Production from the WI Properties is generally sold pursuant to a gas
purchase contract between WPC and WPX Gas Resources Company ("WPX Gas
Resources") (formerly known as WFS Gas Resources, as successor in interest to
Williams Gas Marketing Company) (as amended, the "Gas Purchase Contract"). The
Gas Purchase Contract provides certain protections for WPX Gas Resources in the
form of price credits (for production purchased by WPX Gas Resources on or after
January 1, 1994) and for Unitholders when the applicable Blanco Hub Spot Price
falls below $1.75 per MMBtu and provides certain benefits for WPX Gas Resources
when the Blanco Hub Spot Price exceeds $2.00 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.

     The initial five-year term ("Primary Term") of the Gas Purchase Contract
expired on December 31, 1997. Following the expiration of the Primary Term, the
Gas Purchase Contract will


                                       13
<PAGE>   14


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 fifteen days prior to the end of each Contract Year,
to discontinue purchasing gas from WPC under the terms 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. For each of the contract years 1998,
1999 and 2000, WPX Gas Resources did not exercise this option and the pricing
mechanism of the Primary Term therefore has and will continue to remain in
effect through at least December 31, 2000.

     The Blanco Hub Spot Price was above $1.75 per MMBtu during January,
February and March 2000. However, pursuant to the terms of the Gas Purchase
Contract, WPX Gas Resources continued to purchase gas produced from the WI
Properties at the $1.70 minimum purchase price, less certain gathering,
processing and delivery costs paid by WPX Gas Resources, established by the Gas
Purchase Contract; and WPX Gas Resources recouped previously accrued price
credits for each MMBtu of natural gas so purchased equal to the difference
between the $1.70 minimum purchase price and the applicable index price (which
price is equal to 97 percent of the applicable Blanco Hub Spot Price). WPC
estimates that, as of March 31, 2000, WPX Gas Resources had aggregate price
credits in the price credit account of approximately $3.2 million of which the
Trust's 81 percent interest in Quatro Finale's interest in the WI Properties,
represents a potential offset of $2.6 million against future royalty income
otherwise payable to the Trust. The applicable index price was above $1.75 per
MMBtu in April 2000.

     The entitlement of WPX Gas Resources to recoup the price credits means that
if and when the applicable Blanco Hub Spot Price rises above $1.75 per MMBtu,
future royalty income paid to the Trust would be reduced until such time as such
price credits have been fully recouped. Corresponding cash distributions to
Unitholders would also be reduced.

     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.

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.


                                       14
<PAGE>   15


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 Quatro Finale
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, particularly to the extent a
balance exists in the price credit account. See "Item 2 -- The Royalty Interests
-- Gas Purchase Contract" in the 1999 Annual Report for detailed information
about the Gas Purchase Contract and its impact on the Trust and Unitholders.

     The Trust is a passive entity and 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.


                                       15
<PAGE>   16


                           PART II - OTHER INFORMATION

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

     (a)      Exhibit No.               Description

                  27               Financial Data Schedule

     (b)      No reports on Form 8-K were filed during the quarter for which
              this report is filed.


                                       16
<PAGE>   17


                                   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 Hooper
                                                --------------------------------
                                                Ron Hooper
                                                Vice President and Administrator


               (The Trust has no directors or executive officers.)


Date: May 12, 2000