<PAGE>   1

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                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

[X]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 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 1-8581

                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                            <C>
                         TEXAS                                                72-6108468
     (State or other jurisdiction of incorporation                         (I.R.S. Employer
                    or organization)                                      Identification No.)

   CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, TRUSTEE                            77002
                    712 MAIN STREET                                           (Zip Code)
                     HOUSTON, TEXAS
        (Address of principal executive offices)
</TABLE>

       Registrant's telephone number, including area code: (713) 216-5712

                      ....................................

   (Former name, former address and former fiscal year, if changed since last
                                    report)

     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  ______
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<PAGE>   2

                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Part I.  Financial Information

  Item 1.  Financial Statements:
     Statements of Royalty Proceeds and Distributable
      Cash..................................................    3
     Statements of Assets, Liabilities and Trust Corpus.....    3
     Statements of Changes in Trust Corpus..................    3
     Notes to Financial Statements..........................    4
     Report of Independent Public Accountants...............    8

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

Part II.  Other Information

  Item 6.  Exhibits and Reports on Form 8-K.................    13

Signature...................................................    14
</TABLE>

                                      --2--
<PAGE>   3

                         PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST

             STATEMENTS OF ROYALTY PROCEEDS AND DISTRIBUTABLE CASH
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                 SEPTEMBER 30,               SEPTEMBER 30,
                                                           -------------------------   -------------------------
                                                              2000          1999          2000          1999
                                                           -----------   -----------   -----------   -----------
<S>                                                        <C>           <C>           <C>           <C>
Royalty proceeds.........................................  $        --   $        --   $        --   $        --
Trust administrative expenses............................      (57,027)      (89,438)     (232,290)     (431,553)
Interest income..........................................       10,542        11,954        31,926        39,072
Reserve for future Trust expenses........................       46,485        77,484       200,364       392,481
                                                           -----------   -----------   -----------   -----------
Distributable cash.......................................  $        --   $        --   $        --   $        --
                                                           ===========   ===========   ===========   ===========
Distributable cash per unit..............................  $        --   $        --   $        --   $        --
                                                           ===========   ===========   ===========   ===========
Units outstanding........................................   14,975,390    14,975,390    14,975,390    14,975,390
                                                           ===========   ===========   ===========   ===========
</TABLE>

               STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  2000            1999
                           ASSETS                             -------------   -------------
                                                               (UNAUDITED)
<S>                                                           <C>             <C>

Cash and short-term investments.............................  $     696,256   $     896,620
Net overriding royalty interest in oil and gas properties...    189,875,741     189,875,741
Less, adjustment to recorded cost of net overriding royalty
  interest
  in oil and gas properties.................................    (25,614,756)    (25,614,756)
Less, accumulated amortization of net overriding royalty
  interest..................................................   (164,260,985)   (164,260,985)
                                                              -------------   -------------
        Total assets........................................  $     696,256   $     896,620
                                                              =============   =============

                               LIABILITIES AND TRUST CORPUS

Reserve for future Trust expenses...........................  $     696,256   $     896,620
Trust corpus (14,975,390 Units of Beneficial Interest
  authorized, issued and outstanding).......................             --              --
                                                              -------------   -------------
        Total liabilities and trust corpus..................  $     696,256   $     896,620
                                                              =============   =============
</TABLE>

                      STATEMENT OF CHANGES IN TRUST CORPUS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                              --------------------
                                                                2000        1999
                                                              --------    --------
<S>                                                           <C>         <C>
Trust corpus, beginning of year.............................  $     --    $     --
Royalty proceeds and interest income, net of trust
  administrative expenses and reserve for future Trust
  expenses..................................................        --          --
Distributions payable to Unit holders.......................        --          --
Amortization of net overriding royalty interest.............        --          --
                                                              --------    --------
Trust corpus, end of period.................................  $     --    $     --
                                                              ========    ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      --3--
<PAGE>   4

                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST

                         NOTES TO FINANCIAL STATEMENTS
                                  (UNAUDITED)

1. THE TRUST

     Freeport-McMoRan Oil and Gas Royalty Trust (the Trust) was created
effective September 30, 1983. On that date, Freeport-McMoRan Inc. (FTX)
transferred to a Partnership (the Partnership) a net overriding royalty interest
in certain offshore oil and gas properties equal to 90 percent of the Net
Proceeds (as defined in the Conveyance referred to below) from FTX's working
interests in such properties and conveyed a 99.9 percent general partnership
interest in the Partnership to the Trust. Such net overriding royalty interest
is referred to herein as the "Royalty." The Overriding Royalty Conveyance which
created the Royalty is referred to herein as the "Conveyance." The Trust is
passive, with Chase Bank of Texas, National Association as Trustee. The Trustee
has only such powers as are necessary for the collection and distribution of
revenues attributable to the Royalty, the payment of Trust liabilities and the
protection of Trust assets.

     The Trust Indenture provides generally that the Trust shall terminate upon
the first to occur of: (i) the sale of all the Trust's interest in the
Partnership, or the sale by the Partnership of all the assets of the partnership
including the Royalty, or (ii) a decision to terminate the Trust by the
affirmative vote of Unit holders representing a majority of the Units. The Trust
Indenture also provides that the Trustee is required to sell the Trust's
interest in the Partnership, or cause the Partnership to sell the Royalty, if
the Trust's cash receipts for each of three successive years are less than $3
million, thereby terminating the Trust pursuant to (i) above. The Trust's cash
receipts were less than $3 million dollars in 1996, 1997, and 1998 and,
therefore, the terms of the Trust Indenture dictate that the Trustee effect such
a sale. However, the Unit holders of the Trust, at a special meeting of the Unit
holders held on March 12, 1999, approved a shareholder proposal to amend the
Trust Indenture to extend the life of the Trust for two years. The extension
expires on December 31, 2000. At that time, pursuant to the Trust Indenture, the
Trustee is required to liquidate the Trust and conduct a sale of the Trust
assets. The Trustee expects that a sale will occur in the first or second
quarter of the year 2001.

     As of September 30, 2000, the Class A cost carry-forward was 19.7 million,
primarily from the significant development costs incurred at West Cameron Blocks
498 and 215. This cost carry-forward must be recouped by IMC Global, Inc
("IMC"), the Working Interest Owner, before any distribution may be made to the
Trust. The Working Interest Owner has advised the Trustee that, based on an
independent review of the oil and gas interests burdened by the Royalty, the net
present value of the reserves contained therein is substantially less than the
cumulative excess Class A cost carry-forward. The information from the Working
Interest Owner indicates that the Royalty may have little or no value, based on
the net present value of reserves determined as a result of the independent
review.

2. THE ROYALTY

     IMC succeeded to FTX effective December 22, 1997, following the merger of
FTX into IMC. Accordingly, IMC is now the Working Interest Owner and owns the
oil and gas interests burdened by the

                                      --4--
<PAGE>   5
            NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

Royalty. The Conveyance provides that the owner of the interests burdened by the
Royalty will calculate and pay monthly to the Partnership an amount equal to 90
percent of the net proceeds for the preceding month. Net proceeds generally
consist of the excess of gross revenues received from the Royalty Properties
(Gross Proceeds), on a cash basis, over operating costs, capital expenditures,
and other charges, on an accrual basis, including cost carry-forwards (Net
Proceeds).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The accompanying unaudited financial information has been prepared by the
Trustee in accordance with the instructions to Form 10-Q, and the Trustee
believes such information includes all the disclosures necessary to make the
information presented not misleading. The information furnished reflects all
adjustments which are, in the opinion of the Trustee, necessary for a fair
presentation of the results for the interim periods presented. The financial
information should be read in conjunction with the financial statements and
notes thereto included in the Trust's 1999 Annual Report on Form 10-K.

     The Trust's financial statements are prepared on the cash basis of
accounting for reporting revenues and expenses. Therefore, revenues and expenses
are recognized only as cash is received or paid and the associated receivables,
payables and accrued expenses are not reflected in the accompanying financial
statements. Under generally accepted accounting principles, revenues and
expenses would be recognized on an accrual basis.

     The initial carrying amount of the Royalty represented the Working Interest
Owner's net book value applicable to the interest in the properties conveyed to
the Trust on the date of creation of the Trust. Amortization of the Royalty has
been charged directly against trust corpus using the future net revenue method.
This method provides for calculating amortization by dividing the unamortized
portion of the Royalty by estimated future net revenues from proved reserves and
applying the resulting rate to the Trust's share of royalty proceeds.

     The carrying value of the Royalty is limited to the discounted present
value (at 10 percent) of estimated future net cash flows. Any excess carrying
value is reduced and the adjustment is charged directly against trust corpus.
The carrying value of the Royalty is $0 at September 30, 2000. The carrying
value is not necessarily indicative of the fair market value of the Royalty held
by the Trust.

4. DISTRIBUTIONS TO UNIT HOLDERS

     As a result of the capital costs incurred in recent years, a cumulative
excess Class A cost carry-forward of 19.7 million existed as of September 30,
2000. The cost carry-forward is subject to and includes an interest amount at
the prime rate, which totaled 1.6 million net to the Trust during the nine month
period ended September 30, 2000. This excess Class A cost carry-forward,
including the interest factor, must be recouped by the Working Interest Owner
out of future Gross Proceeds before distributions to the Unit holders can be
resumed.

                                      --5--
<PAGE>   6
            NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

5. GAS BALANCING ARRANGEMENTS

     As a result of past curtailments in gas takes by the principal purchaser of
production from the Royalty Properties, certain quantities of gas have been sold
by other parties with interests in the Royalty Properties pursuant to gas
balancing arrangements. Proceeds from gas produced from the Royalty Properties
but sold by other parties pursuant to such balancing arrangements
(underproduction) are not included in Gross Proceeds for purposes of calculating
the Royalty. In the future, the Working Interest Owner will be entitled to sell
volumes equal to such underproduction or receive cash settlements. On certain of
the Royalty Properties, a cash settlement may be required, depending on future
results, due to the lack of sufficient remaining reserves from which to makeup
any underproduction. As of September 30, 2000, the unrecovered quantity of gas
sold by third parties pursuant to such gas balancing arrangements since
inception of the Trust was approximately 0.2 billion cubic feet (bcf), net to
the Trust. Gross Proceeds will be increased in future periods when the Working
Interest Owner is compensated either through the sale of gas or through cash
settlements, the amount and timing of which are uncertain.

6. ESTABLISHMENT OF AN EXPENSE RESERVE

     Because of the decline in Royalty income, at certain times since late 1993
the Trust was unable to pay its ongoing administrative expenses. To permit the
Trust to pay its routine administrative expenses, the Trustee, in accordance
with the Trust Indenture, established an expense reserve of $2.4 million of
which $696,256 remained as of September 30, 2000. Because of the cumulative
excess of Class A cost carry-forward, $200,364 was withdrawn from the expense
reserve during the first nine months of 2000 to pay Trust administrative
expenses.

     The funding for this reserve is deposited with Chase Bank of Texas and
invested in Chase Bank of Texas collateralized certificates of deposit. The
average interest rate earned on these funds for the third quarter of 2000 was
5.7 percent.

7. FEDERAL INCOME TAX MATTERS

     Because the Trust is a grantor trust which is not a taxable entity, no
income taxes are reported in the Trust's financial statements. The tax
consequences of owning Units are included in the federal, state and local income
tax returns of the individual Unit holders.

8. RESERVE FOR FUTURE ESTIMATED ABANDONMENT COSTS

     Estimated future abandonment costs are accrued over the life of the Trust's
properties based on current laws and regulations. During the 1997 fourth
quarter, an updated assessment of estimated future abandonment costs was
undertaken by the Working Interest Owner taking into consideration current labor
and equipment cost levels and permitted abandonment practices. This assessment
resulted in a revision of estimated remaining future abandonment costs to an
amount that is approximately equal to amounts previously withheld from
distributions to Unit holders. Such costs are by their nature imprecise and can
be expected to be revised

                                      --6--
<PAGE>   7
            NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

over time because of changes in general and specific cost levels, government
regulations, operation or technology. As of September 30, 2000, the estimated
remaining aggregate abandonment costs to be incurred for all of the Trust's
properties totaled $4.2 million net to the Trust, all of which has been withheld
from distributions to Unit holders.

9. TRANSPORTATION AGREEMENT

     In December 1997, the Working Interest Owner entered into a crude oil
transportation agreement with an oil pipeline company to deliver on a daily
basis specified quantities of crude oil from West Cameron 498. Under the terms
of the agreement, the Working Interest Owner agreed to pay a transportation fee
calculated at a sliding monthly rate based upon the total average daily volumes
delivered from West Cameron 498 during the month. Should the annual minimum
delivery volume not be met, a deficiency payment is assessed by the pipeline.
During 1999 and 1998 the Working Interest Owner did not deliver the minimum
volume under the agreement. Therefore, the pipeline company billed the Working
Interest Owner approximately $724,000 and $687,000 for the 1999 and 1998
deficiencies, respectively. This amount is included in the Class A cost carry-
forward of $19.7 million at September 30, 2000. Based on 2000 projected
production the minimum delivery volumes will not be met in 2000. However should
production exceed the 2000 minimum, the Working Interest Owner is entitled to
receive transportation without payment up to the cumulative prior undelivered
volumes.

                                      --7--
<PAGE>   8

                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Chase Bank of Texas National Association (Trustee)
and the Unit Holders of Freeport-McMoRan Oil and Gas Royalty Trust:

     We have reviewed the accompanying statement of assets, liabilities and
trust corpus of Freeport-McMoRan Oil and Gas Royalty Trust as of September 30,
2000, the related statements of royalty proceeds and distributable cash and
changes in trust corpus for the three and nine month periods ended September 30,
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 review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit in accordance with auditing standards generally accepted in the United
States, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

     As discussed in Note 3, these financial statements were prepared on the
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 financial statements referred to above for them to be in
conformity with the cash basis of accounting.

     We have previously audited, in accordance with auditing standards generally
accepted in the United States, the statement of assets, liabilities and trust
corpus of Freeport-McMoRan Oil and Gas Royalty Trust as of December 31, 1999
and, in our report dated March 30, 2000, we expressed an unqualified opinion on
that statement.

                                          ARTHUR ANDERSEN LLP

Houston, Texas
November 14, 2000

                                      --8--
<PAGE>   9

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION

     The information contained herein regarding operations and exploration and
development activities on the properties burdened by the Royalty has been
furnished by the Working Interest Owner who obtained this information from the
relevant operators. For convenience, references are made to the Notes to
Financial Statements.

     The following discussion includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Although it is believed that these
forward-looking statements are based on reasonable assumptions, important
factors could cause actual results to differ materially from those in the
forward-looking statements herein, including the timing and extent of changes in
commodity prices for oil and gas, environmental risks, drilling and operating
risks, risks related to exploration and development, uncertainties about oil and
gas reserves, governmental regulations and other matters beyond the control of
the Trustee and the Working Interest Owner.

     There were no proved reserve quantities and related discounted cash flows
attributable to the Trust as of December 31, 1999. Such proved reserve estimates
are based on various assumptions, many of which are subject to uncertainties, as
more fully discussed in the Trust's Annual Report on Form 10-K. These estimates
do not consider changes in prices and costs subsequent to December 31, 1999, or
the possibility of additional potentially recoverable reserves not currently
classified as proved, and therefore should not be considered to be a prediction
of actual amounts to be paid to the Trustee or an estimate of fair market value.
The Working Interest Owner has advised the Trustee that, based on an independent
review of the oil and gas interests burdened by the Royalty, the net present
value of the reserves contained therein is substantially less than the
cumulative excess Class A cost carry-forward. The information from the Working
Interest Owner indicates that the Royalty may have little or no value, based on
the net present value of reserves determined as a result of the independent
review.

RESULTS OF OPERATIONS

     There were no cash distributions to Unit holders during the first nine
months of 2000 or 1999. No cash distributions were made during 1999, 1998 and
1997, because of capital expenditures and lower gas and oil revenues. During the
third quarter of 2000, Gross Proceeds exceeded total costs by approximately $0.4
million. As a result, the Class A cost carry-forward decreased by $0.4 million,
from $20.1 million at June 30, 2000, to

                                      --9--
<PAGE>   10

$19.7 million at September 30, 2000. Since mid-1995, trust administrative
expenses have been paid from the expense reserve. The calculation of
distributable cash for each year follows:

<TABLE>
<CAPTION>
                                                  THREE MONTHS                NINE MONTHS
                                                     ENDED                       ENDED
                                                 SEPTEMBER 30,               SEPTEMBER 30,
                                            ------------------------   -------------------------
                                               2000         1999          2000          1999
                                            ----------   -----------   -----------   -----------
<S>                                         <C>          <C>           <C>           <C>
Gross Proceeds(1).........................  $1,432,778   $ 2,298,241   $ 6,927,099   $ 4,854,571
Total Costs(2)............................    (984,703)    3,812,932    (3,893,808)   (1,289,047)
Excess Class A cost carry-forward,
  net(3)..................................    (448,075)   (6,111,173)   (3,033,291)   (3,565,524)
                                            ----------   -----------   -----------   -----------
Net Proceeds..............................                        --            --            --
Percentage attributable to Royalty........        90.0%         90.0%         90.0%         90.0%
                                            ----------   -----------   -----------   -----------
Amount payable attributable to Royalty....          --            --            --            --
Percentage attributable to Trust..........        99.9%         99.9%         99.9%         99.9%
Royalty Proceeds..........................          --            --            --            --
Trust administrative expenses.............     (57,027)      (89,438)     (232,290)     (431,553)
                                            ----------   -----------   -----------   -----------
                                               (57,027)      (89,438)     (232,290)     (431,553)
Interest income...........................      10,542        11,954        31,926        39,072
Reserve for future Trust expenses(4)......      46,485        77,484       200,364       392,481
                                            ----------   -----------   -----------   -----------
Distributable cash........................  $       --   $        --   $        --   $        --
                                            ==========   ===========   ===========   ===========
</TABLE>

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

(1) Represents amounts received by the Working Interest Owner during the three
    and nine month periods ended in September of such year.

(2) Represents amounts accrued by the Working Interest Owner during the three
    and nine month periods ended in August of such year. Includes accrued
    interest of $524,579 and $1,555,949 for the three and nine months during
    2000 and $581,465 and $1,730,137 for the three and nine months during 1999.

(3) Represents the increase (decrease) in the Class A cost carry-forward during
    the respective period.

(4) Represents withdrawals from the Trust administrative expense reserve during
    the respective periods.

                                     --10--
<PAGE>   11

     Gross Proceeds, which include gas and oil revenues, are calculated based on
amounts received by the Working Interest Owner. Operating information follows:

<TABLE>
<CAPTION>
                                                              THREE MONTHS       NINE MONTHS
                                                                  ENDED             ENDED
                                                              SEPTEMBER 30,     SEPTEMBER 30,
                                                             ---------------   ---------------
                                                              2000     1999     2000     1999
                                                             ------   ------   ------   ------
<S>                                                          <C>      <C>      <C>      <C>
Natural Gas
  Revenues (in millions)...................................  $  0.5   $  1.8   $  1.5   $  3.3
  Sales volumes (in million cubic feet)....................     154    1,331      552    2,073
  Average realization (per thousand cubic feet)............  $ 3.29   $ 1.39   $ 2.83   $ 1.57
Oil
  Revenue (in millions)....................................  $   .9   $  0.5   $  5.4   $  1.6
  Sales volumes (in thousands of barrels)..................    30.2     37.1    187.5    134.8
  Average realization (per barrel).........................  $30.65   $12.13   $28.58   $11.84
</TABLE>

     Oil and gas production volumes for the third quarter of 2000 decreased
compared to the 1999 period. This is primarily due to declining production from
West Cameron Block 498. The operator completed several well recompletions during
the third quarter of 2000 as part of its ongoing efforts to mitigate the
declining production rates for the field and to recover reserves from behind
pipe zones in existing wells. In addition, gas volumes and revenue were
significantly lower for the nine month period ended September 30, 2000 as
compared to the 1999 period due to the settlement of the gas imbalances for West
Cameron Block 215 and Breton Sound Block 58 and Breton Sound Block 55 received
during 1999.

     The operator also proposed contributing acreage from an adjacent block,
West Cameron 519, and drilling an exploratory well. IMC evaluated geophysical
and geological data provided by the operator and determined the data did not
support the proposal. IMC, therefore, did not choose to participate in drilling
the exploratory well.

     Average oil and gas prices during the third quarter of 2000 increased
compared to the 1999 period and resulted in a significant increase in revenues
from oil and gas sales, in spite of the lower sales quantities. Average oil
prices during the nine month period ended September 30, 2000 increased compared
to the 1999 period and resulted in a significant increase in revenue.

Costs consist of the following (in millions):

<TABLE>
<CAPTION>
                                                               THREE MONTHS     NINE MONTHS
                                                                  ENDED            ENDED
                                                              SEPTEMBER 30,    SEPTEMBER 30,
                                                              --------------   --------------
                                                              2000     1999    2000     1999
                                                              -----   ------   -----   ------
<S>                                                           <C>     <C>      <C>     <C>
Lease operating expenses....................................  $0.3    $  --    $0.7    $ 2.6
Exploration and development costs...........................   0.1       --     1.4      1.4
Interest, abandonment costs withheld and other..............   0.6      0.6     1.7      1.7
Abandonments cost...........................................    --     (4.4)     --     (4.4)
                                                              ----    -----    ----    -----
                                                              $1.0    $(3.8)   $3.8    $ 1.3
                                                              ====    =====    ====    =====
</TABLE>

                                     --11--
<PAGE>   12

     Lease operating expenses for the third quarter of 2000 increased over the
1999 period because the workover program on West Cameron Block 498. In addition,
during 1999 The Working Interest Owner believed the costs charged for High
Island 552 to be excessive and therefore did not pay the operator during 1999
for operating expenses related to this property. The Working Interest Owner
conducted an audit of High Island Block 552 in the fourth quarter of 1999. This
audit resulted in a credit issued by the operator of $1.5 million net to the
Working Interest Owner. This credit was issued during the first quarter of 2000
and the check was received in the second quarter of 2000. This is the primary
reason the lease operating expenses are lower for the first nine months ending
September 30, 2000 as compared to the same period of 1999. The Working Interest
Owner is entitled to operating and processing fees attributable to production
from offsetting blocks being processed on the High Island A552 platform.

     In December 1997, the Working Interest Owner entered into a crude oil
transportation agreement with an oil pipeline company to deliver on a daily
basis specified quantities of crude oil from West Cameron 498. Under the terms
of the agreement, the Working Interest Owner agreed to pay a transportation fee
calculated at a sliding monthly rate based upon the total average daily volumes
delivered from West Cameron 498 during the month. Should the annual minimum
delivery volume not be met, a deficiency payment is assessed by the pipeline.
During 1998 the Working Interest Owner did not deliver the minimum volume under
the agreement and therefore, in February 1999, the pipeline company billed the
Working Interest Owner approximately $687,000 for the 1998 deficiency. This
amount was included in the Class A cost carry-forward in 1999. During 1999 the
Working Interest Owner did not deliver the minimum volume under the agreement
therefore, in February 2000, the pipeline company billed the Working Interest
Owner approximately $724,000 for the 1999 deficiency. This amount was paid and
was included in the Class A cost carry-forward in the second quarter of 2000.
Based on 2000 projected production the minimum delivery volumes will not be met
in 2000. However, should production exceed the 2000 minimum the Working Interest
Owner is entitled to receive transportation without pay up to the cumulative
prior undelivered volumes.

     Exploration and development costs for the third quarter relate primarily to
the payment during 2000 of invoices relating to capital workovers performed in
1999 and 2000 at West Cameron Block 498.

CAPITAL RESOURCES AND LIQUIDITY

     All revenues received by the Trust, net of Trust administrative expenses
and liabilities, are distributed to the Unit holders in accordance with
provisions of the Trust Indenture. The Class A cost carry-forward, with interest
at the prime rate, must be recouped from future Gross Proceeds before any
distribution may be made to Unit holders.

     Additional exploration may be proposed by the operators of certain other
Royalty Properties. After analyzing each proposal, the Working Interest Owner
will determine whether or not to participate in additional exploratory
operations. On April 28, 2000, the operator of West Cameron Block 498 proposed
workovers on certain wells which is expected to increase current production. The
cost of these workovers is estimated to be approximately $2 million to the
Working Interest Owner. The Working Interest Owner approved each of these
proposals that include adding new producing intervals for three wells and
installing additional production equipment required to process anticipated
quantities of gas and water. The operator also proposed drilling an exploration
well on the adjacent West Cameron Block 519 and offered participation to the
owners of West
                                     --12--
<PAGE>   13

Cameron 498. The Working Interest Owner determined that this proposal had a low
probability of economic success and chose not to participate.

     There are no exploration and development costs budgeted for 2000. However,
during the third quarter of 2000, the Working Interest Owner approved the $2
million for workovers as discussed above.

     The Working Interest Owner is reviewing all options relating to its
ownership interest in the remaining properties, including discussions with
several unitholders.

     As of September 30, 2000, the estimated remaining aggregate abandonment
costs to be incurred for all of the Trust's properties totaled $4.2 million net
to the Trust, all of which has been withheld from distributions to Unit holders.
Such costs are by their nature imprecise and can be expected to be revised over
time because of changes in general and specific cost levels, governmental
regulations, operations or technology. Any further adjustments to estimated
abandonment costs or variances to actual cost will reduce or increase future
distributable cash accordingly.

     At certain times since late 1993, the Trust has been unable to pay its
ongoing administrative expenses. To permit the Trust to pay its administrative
expenses during the time the Trust incurs a Class A cost deficit, the Trustee,
in accordance with the Trust Indenture, established a $2.4 million Trust
administrative expense reserve to pay such expenses (see Note 6 -- Establishment
of an Expense Reserve), of which $0.7 million remained at September 30, 2000.

     The Trustee may sell or dispose of its interest in the Partnership, or
permit the Partnership to sell or dispose of all or any part of the Royalty,
only as authorized by a vote of Unit holders, upon termination of the Trust and
in certain other limited circumstances. However, the Trust is directed to effect
such a sale (without any such vote) if the Trust's cash receipts for each of
three successive years are less than $3 million. The Trustee must distribute the
net proceeds of such sale (after satisfaction of any outstanding liabilities) to
the Unit holders. The Trust's had no cash receipts in 1996, 1997, 1998 or 1999.
Additionally, the balance of the Class A cost carry-forward was $19.7 million at
September 30, 2000, primarily from the significant development costs incurred at
West Cameron Blocks 498 and 215 during 1997 and 1998. This cost carry-forward
must be recouped by the Working Interest Owner before any distribution may be
made to the Trust.

                           PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

     (a) Exhibits

         Exhibit No. 27 -- Financial Data Schedule

     (b) Reports on Form 8-K:

         No Reports on Form 8-K were filed with the Securities and Exchange
         Commission during the third quarter of 2000.

                                     --13--
<PAGE>   14

                                   SIGNATURE

     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.

                                            FREEPORT-McMoRan OIL AND GAS
                                            ROYALTY TRUST

                                            By: The Chase Manhattan Bank Trustee

                                            By:       /s/ MIKE ULRICH
                                              ----------------------------------
                                                         Mike Ulrich
                                               Senior Vice President and Trust
                                                            Officer

Date: November 14, 2000

                                     --14--
<PAGE>   15

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                       DESCRIPTION
         ------                                       -----------
<C>                           <S>
           27                 Financial Data Schedule
</TABLE>