<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, 2002
                                               ------------------

                                       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 November 1, 2002:
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, 2001 (the "2001 Annual Report").
The December 31, 2001 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, 2002, the
distributable income for the three-month and nine-month periods ended September
30, 2002 and 2001, and the changes in trust corpus for the nine-month periods
ended September 30, 2002 and 2001, 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, 2002 and for the
three-month and nine-month periods ended September 30, 2002 and 2001 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
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,
2002, and the related condensed statements of distributable income for the
three-month and nine-month periods ended September 30, 2002 and 2001 and the
condensed statements of changes in trust corpus for the nine-month periods ended
September 30, 2002 and 2001. 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, 2001, 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 27,
2002, 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, 2001, 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 13, 2002


                                        3

<PAGE>


WILLIAMS COAL SEAM GAS ROYALTY TRUST

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


<Table>
<Caption>
                                                            September 30,    December 31,
                                                                2002             2001
                                                            -------------    ------------

<S>                                                         <C>              <C>
ASSETS

Current Assets - cash and cash equivalents                  $    171,677     $     91,492

Royalty interests in oil and gas properties
        (less accumulated amortization
        of $119,099,594 at
        September 30, 2002 and
        $116,036,626 at December 31, 2001)                    19,467,069       22,530,037
                                                            ------------     ------------

TOTAL ASSETS                                                $ 19,638,746     $ 22,621,529
                                                            ============     ============


LIABILITIES AND TRUST CORPUS

Current Liabilities -trust expenses payable                 $    148,416     $     76,777

Trust corpus -9,700,000 units of
        beneficial interest authorized
        and outstanding                                       19,490,330       22,544,752
                                                            ------------     ------------

TOTAL LIABILITIES
        AND TRUST CORPUS                                    $ 19,638,746     $ 22,621,529
                                                            ============     ============
</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, 2002   September 30, 2001
                                                             ------------------   ------------------

<S>                                                          <C>                  <C>
Royalty income                                                  $  2,341,940         $  6,547,688
Interest income                                                        2,042               15,848
                                                                ------------         ------------
                                                                   2,343,982            6,563,536

General and administrative expenses                                 (118,154)            (137,791)
                                                                ------------         ------------
Distributable income                                            $  2,225,828         $  6,425,745
                                                                ============         ============

Distributable income per unit
     (9,700,000 units)                                          $        .23         $        .66
                                                                ============         ============
</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, 2002         September 30, 2001
                                                        ------------------         ------------------

<S>                                                     <C>                        <C>
Royalty income                                             $  5,694,286               $ 21,189,876
Interest income                                                   4,930                     65,751
                                                           ------------               ------------
                                                              5,699,216                 21,255,627

General administrative expenses                                (536,469)                  (529,264)
                                                           ------------               ------------
Distributable income                                       $  5,162,747               $ 20,726,363
                                                           ============               ============

Distributable income per unit
     (9,700,000 units)                                     $        .53               $       2.14
                                                           ============               ============
</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, 2002         September 30, 2001
                                                        ------------------         ------------------

<S>                                                     <C>                        <C>
Trust corpus, beginning of period                          $ 22,544,752              $ 30,670,270

Amortization of royalty interests                            (3,062,968)               (6,836,067)


Distributable income                                          5,162,747                20,726,363
Distributions to unitholders                                 (5,154,201)              (20,749,623)
                                                           ------------              ------------
Trust corpus, end of period                                $ 19,490,330              $ 23,810,943
                                                           ============              ============

Distributions per unit
      (9,700,000 units)                                    $        .53              $       2.14
                                                           ============              ============
</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. During the period from December 2001
through September 2002, Williams exercised its option to purchase 465,500 of
the QFIV transferred Units and simultaneously sold these Units to the public.

         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"). 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, 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.



                                        8

<PAGE>


         As used in this Report, the term "Quatro Finale" generally refers to
either of Quatro Finale LLC or Quatro Finale V LLC that at the time in question
was or is the owner of the Underlying Properties. Consequently, unless otherwise
dictated by context, "Quatro Finale" generally means (a) with respect to the
period May 1, 1997 until February 1, 2001, Quatro Finale LLC (which entity
acquired and owned the Underlying Properties effective from May 1, 1997 until
February 1, 2001), and (b) with respect to the period from and after March 1,
2001, Quatro Finale V LLC (which entity acquired and has owned the Underlying
Properties effective and since March 1, 2001). With respect to the ownership of
the Underlying Properties for any period prior to May 1, 1997, and for the
period from February 1 through February 28, 2001, references herein to Quatro
Finale should be deemed to refer to WPC.

         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
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. From the
inception of the Trust until the fourth quarter of 2000, the NPI generally
entitled 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 complete definitions of NPI Net Proceeds and Infill Net Proceeds are
set forth in the Conveyance.



                                        9

<PAGE>



         The NPI percentage was subject to permanent reduction under certain
conditions and such a reduction to 60% occurred in the fourth quarter of 2000.
Pursuant to the Conveyance, the NPI percentage is not subject to further
reduction or other adjustment regardless of the future amount of cumulative
production or the achieved internal rate of return. See "Item 1 - Financial
Statements.

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.

         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.

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
(the "Code"), so long as the wells are certified by the Federal Energy
Regulatory Commission ("FERC"). This tax credit is calculated annually based on
each year's qualified production through the year 2002. Therefore, the Section
29 tax credit will expire at the end of the year, unless extended by Congress.

         The Section 29 credit is 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



                                       10

<PAGE>



tentative minimum tax liability after the regular tax liability has been reduced
by the foreign tax credit and certain non-refundable personal tax credits. Any
part of the Section 29 credit not allowed for the tax year solely because of
this alternative minimum tax limitation is 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 carry
forward of unused section 29 credits is related to the alternative minimum tax
calculation for succeeding years, carry forwards should be allowed even if the
Section 29 credit is not extended after 2002. Quatro Finale provides the Trustee
with Section 29 tax credit information related to trust properties, which is
then passed along to the unitholder. The Trustee is not aware of any wells that
have not been certified by FERC.

         The tax consequences to a unitholder of the ownership and sale of units
will depend in part on the unitholder's tax circumstances. Each unitholder
should therefore consult the unitholder's tax adviser about the federal, state,
and local tax consequences to the unitholder of the ownership of units.

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.

         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.



                                       11

<PAGE>



5.       SUBSEQUENT EVENTS

         Subsequent to September 30, 2002, the Trust declared the following
distribution:

<Table>
<Caption>
                     Quarterly
                      Record                            Payment                     Distribution
                       Date                              Date                         per Unit
                    ----------                        ----------                    ------------

<S>                                                   <C>                            <C>
                    November 14                       November 29                     $.356223
</Table>

         The distribution per unit increased from $0.221029 for the second
quarter of 2002 to $.356223 for the third quarter of 2002 primarily as a result
of adjustments of approximately $1.2 million from federal unit acreage
expansion. Production in the current quarter prior to federal unit acreage
retroactive adjustment was 5.6 TBtu compared to 5.4 TBtu in the preceding
quarter. Expansions of federal unit acreage can either increase or decrease the
Trust's ownership of particular wells resulting in potential adjustments of
production for prior periods and future associated distributions to unitholders
can either increase or decrease.

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 five-year period, which expired on December 31, 1997, and
continuing for one or more consecutive additional one-year terms 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 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, 2002.

         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, 2002,
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
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



                                       12

<PAGE>



per MMBtu, the Trust receives only 50 percent of the excess of the market price
over the $1.94 per MMBtu. For Production Months in the second quarter of 2002,
which are reported as Royalty Income in the third quarter 2002, 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. The revenues presented in the
accompanying statements of distributable income are recorded when received, are
calculated on an entitlement basis and reflect the most recent BLM participating
area approvals for production recorded through September 30, 2002 and 2001,
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. 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 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.

         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



                                       13

<PAGE>



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
(1) to pay additional royalties of $943,964 on production related to the audit
period of January 1, 1992 through December 31, 1996; (2) to pay an estimated
incremental royalty amount of $991,549 for production covering January 1, 1997
through March 31, 2001; and (3) to perform a restructured accounting and pay an
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 Quatro Finale LLC 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.

         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.



                                       14

<PAGE>


Three Months and Nine Months Ended September 30, 2002 Compared to Three Months
and Nine Months Ended September 30, 2001

         For the quarter ended September 30, 2002, royalty income received by
the Trust amounted to $2,341,940 as compared to $6,547,688 received for the same
quarter in 2001. The decrease in royalty income is due to significantly lower
natural gas prices and a decrease in gas volumes in the 2002 third quarter
compared to the same quarter in 2001. Production related to the royalty income
received by the Trust in the third quarter of 2002 was 1,803,927 MMBtu as
compared to 2,768,877 MMBtu for the same quarter in 2001. Royalty income for the
nine months ended September 30, 2002 was $5,694,286 as compared to $21,189,876
for the same period in 2001. Production related to the royalty income received
by the Trust for the nine months ended September 30, 2002 was 5,387,803 MMBtu as
compared to 7,501,225 MMBtu for the nine months ended September, 30, 2001. Lower
natural gas prices and a decrease in gas volumes resulted in significantly lower
royalty income for the nine months ended September 30, 2002 as compared to the
same 2001 period. Interest income for the quarter ended September 30, 2002 was
$2,042 compared to $15,848 for the same quarter in 2001. Interest income for the
nine months ended September 30, 2002 was $4,930 compared to $65,751 for the same
period in 2001. This decrease in interest income is primarily due to lower cash
invested as a result of lower royalty income and much lower interest rates.
General and administrative expenses during the third quarter of 2002 amounted to
$118,154 compared to $137,791 for the same quarter in 2001. General and
administrative expenses during the nine months ended September 30, 2002 amounted
to $536,469 compared to $529,264 for the same period in 2001.

         Distributable income for the quarter ended September 30, 2002 was
$2,225,828, or $.23 per Unit, as compared to $6,425,745, or $.66 per Unit, for
the third quarter of 2001. This decease was the result of lower natural gas
prices and normal production decline. Distributable income for the nine months
ended September 30, 2002 was $5,162,747 or $.53 per Unit, as compared to
$20,726,363, or $2.14 per Unit, for the same period in 2001. This decrease was a
result of lower natural gas prices and normal production decline. A distribution
of $.221029 per Unit was made on August 29, 2002 to Unitholders of record on
August 14, 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 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 Quatro Finale'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.



                                       15

<PAGE>



         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
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, as shown in the table below in the month immediately following such
calendar quarter. Accordingly, as shown in the tables below, the royalty income
included in distributable income for the quarter ended September 30, 2002 was
based on production volumes and natural gas prices for WI Properties for the
period April 2002 through June 2002, and for Farmout Properties for the period
March 2002 through May 2002. 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
                                                         June 30, 2002               June 30, 2001
                                                         -------------               -------------

<S>                                                      <C>                         <C>
Production (MMBtu) (1)
     WI Properties                                           2,514,872(2)                3,884,165(4)
     Farmout Properties                                        491,676(3)                  730,629(5)

Blanco Hub Spot Price
     ($/MMBtu) (6)                                         $      2.60                  $     4.01
Net Wellhead Price
     WI Properties ($/MMBtu) (6)                           $      1.19                  $     1.93
</Table>

----------

(1)    Million British Thermal Units.

(2)    Includes adjustments to prior distributions of 395,764 MMBtu.

(3)    Reflects estimated volumes for March 2002 through May 2002.

(4)    Includes adjustments to prior distributions of 542,592 MMBtu.

(5)    Reflects estimated volumes for March 2001 through May 2001.

(6)    Simple average of estimates for the months included in the period
       presented.

         Production from the WI Properties is generally sold by Quatro Finale to
WPX Gas Resources pursuant to the Gas Purchase Contract that provides certain
protections for Quatro Finale and Unitholders by providing that WPX Gas
Resources will purchase gas from Quatro Finale 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



                                       16

<PAGE>


from Quatro Finale 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 2001 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
fifteen days prior to the end of each Contract Year, to discontinue purchasing
gas from Quatro Finale 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, 2002.

         The Blanco Hub Spot Price was above $2.00 per MMBtu during the first,
second and third quarters of 2002, with the exception of February, 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, with the exception of February. 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 Quatro Finale
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 2002.

         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.



                                       17

<PAGE>



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. See "Item 2 -- The Royalty
Interests -- Gas Purchase Contract" in the 2001 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.



                                       18

<PAGE>




                           PART II - OTHER INFORMATION

Items 1. through 5.

         Not applicable.

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

         (a)   The exhibit listed below is filed as part of this report:

         Exhibit 15

                    Letter regarding unaudited interim financial information
                    dated November 13, 2002 from the independent accountant
                    which acknowledges awareness of the use in registration
                    statement of a report on unaudited interim financial
                    information.


         Exhibit 99.1

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

         (b)   On August 14, 2002, the Trust filed a report on Form 8-K to
               furnish the Trustee's certification of the Trust's Quarterly
               Report on Form 10-Q for the period ended June 30, 2002 as
               required by 18 U.S.C. Section 1350, as adopted pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002.



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


               (The Trust has no directors or executive officers.)


Date:    November 13, 2002



                                       20

<PAGE>



                                 CERTIFICATIONS

         I, Ron Hooper, certify that:

         1.    I have reviewed this quarterly report on Form 10-Q of Williams
               Coal Seam Gas Royalty Trust, for which Bank of America, N.A.,
               acts as Trustee;

         2.    Based on my knowledge, this quarterly report does not contain any
               untrue statement of a material fact or omit to state a material
               fact necessary to make the statements made, in light of the
               circumstances under which such statements were made, not
               misleading with respect to the period covered by this quarterly
               report;

         3.    Based on my knowledge, the financial statements, and other
               financial information included in this quarterly report, fairly
               present in all material respects the financial condition,
               distributable income and changes in trust corpus of the
               registrant as of, and for, the periods presented in this
               quarterly report;

         4.    I am responsible for establishing and maintaining disclosure
               controls and procedures (as defined in Exchange Act Rules 13a-14
               and 15d-14), or for causing such procedures to be established and
               maintained, for the registrant and I have:

               a)     designed such disclosure controls and procedures, or
                      caused such controls and procedures to be designed, to
                      ensure that material information relating to the
                      registrant, including its consolidated subsidiaries, is
                      made known to me by others within those entities,
                      particularly during the period in which this quarterly
                      report is being prepared;

               b)     evaluated the effectiveness of the registrant's disclosure
                      controls and procedures as of a date within 90 days prior
                      to the filing date of this quarterly report (the
                      "Evaluation Date"); and

               c)     presented in this quarterly report my conclusions about
                      the effectiveness of the disclosure controls and
                      procedures based on my evaluation as of the Evaluation
                      Date;

         5.    I have disclosed, based on my most recent evaluation, to the
               registrant's auditors:

               a)     all significant deficiencies in the design or operation of
                      internal controls which could adversely affect the
                      registrant's ability to record, process, summarize and
                      report financial data and have identified for the
                      registrant's auditors any material weaknesses in internal
                      controls; and

               b)     any fraud, whether or not material, that involves persons
                      who have a significant role in the registrant's internal
                      controls; and



                                       21

<PAGE>



         6.    I have indicated in this quarterly report whether or not there
               were significant changes in internal controls or in other factors
               that could significantly affect internal controls subsequent to
               the date of my most recent evaluation, including any corrective
               actions with regard to significant deficiencies and material
               weaknesses.

               In giving the certifications in paragraphs 4, 5 and 6 above, I
               have relied to the extent I consider reasonable on information
               provided to me by Williams Production Company.



Date:  November 13, 2002         By: /s/ Ron Hooper
                                     ------------------------------------------
                                      Ron Hooper
                                      Senior Vice President and Administrator
                                      Bank of America, N.A.,



                                       22

<PAGE>


                                INDEX TO EXHIBITS


<Table>
<Caption>
Exhibit No.              Description
-----------              -----------

<S>                      <C>
15                       Letter regarding unaudited interim financial information dated
                         November 13, 2002, from the independent accountant which
                         acknowledges awareness of the use in registration statement of a
                         report on unaudited interim financial information.

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



                                       23