<PAGE>   1
 
================================================================================
                                   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, 1997.
 
                                       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.)
 
        TEXAS COMMERCE BANK NATIONAL ASSOCIATION                                 77002
                CORPORATE TRUST DIVISION                                      (Zip Code)
                    712 MAIN STREET
                     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  ______
================================================================================
<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...............    7
 
  Item 2.  Management's Discussion and Analysis of Financial
     Condition and Results of Operations....................    8
 
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,
                                            -------------------------   --------------------------
                                               1997          1996          1997           1996
                                            -----------   -----------   -----------    -----------
<S>                                         <C>           <C>           <C>            <C>
Royalty proceeds..........................  $        --   $        --   $        --    $        --
Trust administrative expenses.............     (135,042)      (88,440)     (307,378)      (319,982)
Interest income...........................       20,597        20,698        58,824         61,074
Reserve for future Trust expenses.........      114,445        67,742       248,554        258,908
                                            -----------   -----------   -----------    -----------
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,
                                                                  1997             1996
                           ASSETS                             -------------    -------------
                                                               (UNAUDITED)
<S>                                                           <C>              <C>
Cash and short-term investments.............................  $   1,735,017    $   1,983,571
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........................    (25,431,543)     (25,431,543)
Less, accumulated amortization of net overriding royalty
  interest..................................................   (164,260,985)    (164,260,985)
                                                              -------------    -------------
          Total assets......................................  $   1,918,230    $   2,166,784
                                                              =============    =============
                LIABILITIES AND TRUST CORPUS
Reserve for future Trust expenses...........................  $   1,735,017    $   1,983,571
Trust corpus (14,975,390 Units of Beneficial Interest
  authorized, issued and outstanding).......................        183,213          183,213
                                                              -------------    -------------
          Total liabilities and trust corpus................  $   1,918,230    $   2,166,784
                                                              =============    =============
</TABLE>
 
                     STATEMENTS OF CHANGES IN TRUST CORPUS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30,
                                                              -----------------------
                                                                1997         1996
                                                              --------    -----------
<S>                                                           <C>         <C>
Trust corpus, beginning of year.............................  $183,213    $   183,213
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.................................  $183,213    $   183,213
                                                              ========    ===========
</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
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 a net overriding royalty interest in certain offshore oil and gas
properties to a Partnership (the Partnership) 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 Texas Commerce Bank 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
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 Trustee will as promptly as possible distribute the
proceeds of any such sales according to the respective interests and rights of
the Unit holders after discharging all of the liabilities of the Trust and, if
necessary, setting up reserves in such amounts as the Trustee in its discretion
deems appropriate for contingent liabilities.
 
     The Trust's cash receipts last reached $3 million during 1995 and there
were no cash receipts in 1996. Significant development costs, primarily at West
Cameron Block 498, have resulted in no cash receipts during the first nine
months of 1997 and have increased the Class A cost carry-forward at September
30, 1997 to $11.2 million. In light of the existing Class A cost carry-forward,
which must be recouped by the Working Interest Owner before any distributions
may be made to the Trust, the additional capital costs projected at West Cameron
Block 498 and West Cameron Block 215 and the timing of production from West
Cameron Block 498, no cash receipts by the Trust are anticipated during the
remainder of 1997. Therefore, unless the Trust has cash receipts of at least $3
million during 1998, the Trust will be terminated by one of the means described
above. The actual level of Trust cash receipts, if any, during 1998 will depend
primarily on the timing and the rate of production from West Cameron Block 498,
the amount and results of future exploration and development costs on West
Cameron Blocks 498 and 215, oil and gas prices and other factors. It is
presently uncertain whether there will be cash receipts to the Trust totaling $3
million or more in 1998, absent which, as described above, the Trustee would be
required to sell the Trust's interest in the Partnership or cause the
Partnership to sell the Royalty. Based on current circumstances, there is a
reasonable possibility that cash receipts to the Trust will not total $3 million
or more in 1998.
 
                                      --4--
<PAGE>   5
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
2. THE ROYALTY
 
     Freeport-McMoRan Oil & Gas Company, a division of FTX (the Working Interest
Owner), presently owns the oil and gas interests burdened by the 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 (Net Proceeds).
 
     On August 27, 1997 FTX and IMC Global Inc. (IGL) announced an Agreement and
Plan of Merger dated August 26, 1997, in which FTX and IGL agree to merge, with
IGL as the surviving entity. The proposed combination, which is subject to
several conditions including approval by the stockholders of both companies,
will result in the acquisition of control by IGL of FTX. FTX and IGL have stated
that the merger transaction is expected to be completed by the end of 1997. As a
result of the merger, IGL will assume the duties and responsibilities of the
Working Interest Owner formerly held by FTX.
 
3. DISTRIBUTIONS TO UNIT HOLDERS
 
     As a result of the capital costs incurred during the past two years, a
cumulative excess Class A cost carry-forward of $11,187,948 existed as of
September 30, 1997. This carry-forward is subject to and includes interest due
the Working Interest Owner at the prime rate, which totaled $371,692 net to the
Trust during the nine month period of 1997. This excess Class A cost
carry-forward must be recouped out of future Net Proceeds before distributions
to the Unit holders can be resumed. See Note 1.
 
4. 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, because of the lack of sufficient remaining reserves from which to
makeup any underproduction. As of September 30, 1997, the unrecovered quantity
of gas sold by third parties pursuant to such gas balancing arrangements since
inception of the Trust was approximately 1.4 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.
 
                                      --5--
<PAGE>   6
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
5. ESTABLISHMENT OF AN EXPENSE RESERVE
 
     Because of the decline in Royalty income, at certain times since late 1993
the Trust has been unable to pay its ongoing administrative expenses. To permit
the Trust to pay its routine administrative expenses during the time the Trust
incurs a Class A cost deficit, the Trustee, in accordance with the Trust
Indenture, established an expense reserve of $2.4 million, of which $1,735,017
remained as of September 30, 1997. Because of the cumulative excess Class A cost
carry-forward (Note 3), $248,554 was withdrawn from the expense reserve to pay
Trust administrative expenses during the first nine months of 1997. There will
be income tax consequences to the Unit holders for such reserve as described in
Note 6 below.
 
     The funding for this reserve is deposited with Texas Commerce Bank and
invested in Texas Commerce Bank collateralized certificates of deposit. The
average interest rate earned on these funds for the third quarter of 1997 was
4.49 percent.
 
6. FEDERAL INCOME TAX MATTERS
 
     Unit holders are required to report taxable income for the Royalty income
received by the Trust and deposited to the expense reserve even if no
distributions were received by the Unit holders. The expense reserve established
for Trust administrative expenses described in Note 5 above will give rise to
future income tax deductions as additional administrative expenses are incurred
and paid with funds deposited in the reserve.
 
7. RESERVE FOR FUTURE ESTIMATED ABANDONMENT COSTS
 
     Estimated future abandonment costs, based on current laws and regulations,
are accrued over the life of the Trust's properties. As of September 30, 1997,
the estimated remaining aggregate abandonment costs to be incurred for all of
the Trust's properties totaled $11.4 million net to the Trust, of which $10.5
million has been withheld from distributions to Unit holders. Estimated future
abandonment costs are by their nature imprecise and can be expected to be
revised over time because of changes in general and specific cost levels,
government regulations, operations and technology. Any adjustments to estimated
abandonment costs or variances to actual costs will reduce or increase future
Class A costs accordingly.
 
                             ---------------------
 
     THE INFORMATION FURNISHED HEREIN SHOULD BE READ IN CONJUNCTION WITH THE
FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST FINANCIAL STATEMENTS FOR THE YEAR
ENDED DECEMBER 31, 1996, WHICH ARE CONTAINED IN ITS ANNUAL REPORT ON FORM 10-K
FOR 1996.
 
                                      --6--
<PAGE>   7
 
                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST
 
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To Texas Commerce Bank 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,
1997, and the related statements of royalty proceeds and distributable cash for
the three-month and nine-month periods ended September 30, 1997 and 1996 and the
statements of changes in trust corpus for the nine month periods ended September
30, 1997 and 1996. These financial statements are the responsibility of the
Working Interest Owner.
 
     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 generally accepted auditing standards, 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.
 
     These financial statements were prepared on the cash basis of accounting,
which is a comprehensive basis of accounting other than generally accepted
accounting principles.
 
     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 generally accepted auditing
standards, the statement of assets, liabilities and trust corpus of
Freeport-McMoRan Oil and Gas Royalty Trust as of December 31, 1996 and, in our
report dated March 7, 1997, we expressed an unqualified opinion on that
statement.
 
                                          ARTHUR ANDERSEN LLP
 
New Orleans, Louisiana,
October 28, 1997
 
                                      --7--
<PAGE>   8
 
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS.
 
     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 the
Trust's reserves, government regulations and other matters beyond the control of
the Trustee and the Working Interest Owner.
 
OPERATIONAL ACTIVITIES
 
     At the West Cameron Block 498 field, four exploratory wells were drilled in
1994 and 1995, which discovered oil and natural gas reserves. Construction of
two platforms and production facilities began in January 1997. The first
platform was installed in the first quarter of 1997 from which the first
development well was drilled in the second quarter but did not encounter its
objectives and was temporarily abandoned. Following the first well, the second
and third development wells were successfully drilled and completed. The
operator at the West Cameron Block 498 field is completing five of these wells
and expects to have the field on production by late November 1997. Subsequently,
the operator plans to incur additional costs in resuming development drilling
with the possibility of reentering two previously drilled wells that were not
completed. In addition, the operator is considering further exploration on this
block. The field is located in 150 feet of water offshore Louisiana. The Working
Interest Owner has a 23.1% working interest and a 19.2% net revenue interest.
 
     At the West Cameron 215 field the Working Interest Owner recently elected
to participate in the West Cameron 215 #8 exploratory well proposed by that
field's operator, with an estimated capital cost of $1.8 million net to the
Trust. In October the well began drilling to a proposed total measured depth of
11,550 feet at a remote location from the existing producing platform. The
operator is currently considering drilling the #9 exploratory well at a
different remote location. If successful, the wells would be produced from new
tripod platforms with production sent to the existing production platform. The
Working Interest Owner has a 31.3% working interest and a 26.1% net revenue
interest in the field.
 
     Drilling operations were completed on an exploratory well on Breton Sound
Block 55 during the second quarter of 1996. This well initiated production in
July 1997 and produced at an average rate of 2.1 MMcf of gas and 70 barrels of
condensate per day during the 1997 third quarter, although operational problems
hampered the consistency of production rates. Production performance will
determine if an offset well will be drilled. There is an additional productive
zone with an estimated 39 feet of net gas pay in the well which is behind pipe
and has not been flow-tested. The Working Interest Owner owns an 18.75% working
interest in Breton Sound Block 55 and a 9.375% working interest and a 6.25%
revenue interest in this well pursuant to a co-development agreement with the
owner of the adjacent block.
 
                                      --8--
<PAGE>   9
 
     During the third quarter of 1997, at the West Cameron Block 65 field, the
Working Interest Owner negotiated an agreement to assign its interests and
abandonment obligations to the operator. The assignment resulted in a reduction
of estimated future abandonment costs of approximately $0.1 million, net to the
Trust.
 
     At the West Delta Block 34 field, the last producing well was shut in
during July 1997. The operator performed remedial work and re-established
production in the third quarter. The Working Interest Owner has a 30.0% working
interest and a 25.0% net revenue interest in the field.
 
CAPITAL RESOURCES AND LIQUIDITY
 
     The Trustee may sell or dispose of the Trust's 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 cash receipts last reached $3 million during 1995 and there
were no cash receipts in 1996. Significant development costs, primarily at West
Cameron Block 498, have resulted in no cash receipts during the first nine
months of 1997 and have increased the Class A cost carry-forward at September
30, 1997 to $11.2 million. In light of the existing Class A cost carry-forward,
which must be recouped by the Working Interest Owner before any distributions
may be made to the Trust, the additional capital costs projected at West Cameron
Block 498 and West Cameron Block 215 and the timing of production from West
Cameron Block 498, no cash receipts by the Trust are anticipated during the
remainder of 1997. Therefore, unless the Trust has cash receipts of at least $3
million during 1998, the Trust will be terminated by one of the means described
above. The actual level of Trust cash receipts, if any, during 1998 will depend
primarily on the timing and the rate of production from West Cameron Block 498,
the amount and results of future exploration and development costs on West
Cameron Blocks 498 and 215, oil and gas prices and other factors. It is
presently uncertain whether there will be cash receipts to the Trust totaling $3
million or more in 1998, absent which, as described above, the Trustee would be
required to sell the Trust's interest in the Partnership or cause the
Partnership to sell the Royalty. Based on current circumstances, there is a
reasonable possibility that cash receipts to the Trust will not total $3 million
or more in 1998.
 
     Total committed exploration and development costs for the remainder of 1997
are presently estimated by the Working Interest Owner to be approximately $3.2
million net to the Trust, primarily for the development of West Cameron Block
498 and the #8 exploration well at West Cameron Block 215. Additional
exploration may be proposed by the operators of certain Royalty Properties, as
to which the Working Interest Owner will evaluate Trust participation after
analyzing each proposal. Specifically, the operators of West Cameron Block 498
and West Cameron Block 215 may propose additional exploration and development
drilling on these blocks which, if the Working Interest Owner elects to
participate in, could total approximately $6 million, net to the Trust. These
estimates may vary from actual costs depending on the success of drilling,
particular circumstances encountered during drilling and many other factors
outside the control of the operators.
 
                                      --9--
<PAGE>   10
 
     Estimated future abandonment costs, based on current laws and regulations,
are accrued over the life of the Trust's properties (Note 7). As of September
30, 1997, the estimated remaining aggregate abandonment costs for the Trust's
properties totaled $11.4 million net to the Trust, of which $10.5 million has
been withheld from distributions to Unit holders. Based on these amounts, future
distributions to Unit holders would be reduced by approximately $0.06 per Unit
over the remaining productive lives of the properties, subject to future
revisions resulting from changes in general and specific cost levels, government
regulations, operations and technology.
 
     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 (Note 5), of which $1.7
million remained at September 30, 1997.
 
                                     --10--
<PAGE>   11
 
RESULTS OF OPERATIONS
 
     There were no cash distributions to the Unit holders during the first nine
months of 1997 or 1996, primarily because of significant capital expenditures.
During the third quarter of 1997, Total Costs exceeded Gross Proceeds by
approximately $4.3 million, because of the capital costs incurred to develop
Breton Sound Block 55 and West Cameron Block 498. As a result, the Class A cost
carry-forward increased to $11.2 million net to the Trust as of September 30,
1997 (Note 3). Because of the Class A cost carry-forward, the Trust
administrative expenses were paid from the expense reserve during 1997. The
calculation of distributable cash for each period follows:
 
<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED             NINE MONTHS ENDED
                                              SEPTEMBER 30,                 SEPTEMBER 30,
                                        -------------------------    ---------------------------
                                           1997           1996           1997           1996
                                        -----------    ----------    ------------    -----------
<S>                                     <C>            <C>           <C>             <C>
Gross Proceeds(1).....................  $   611,008    $1,072,662    $  2,225,635    $ 3,004,707
Total Costs(2)........................   (4,936,236)     (948,196)    (11,904,354)    (4,024,277)
Excess Class A cost (recovery) carry-
  forward, net(3).....................    4,325,228      (124,466)      9,678,719      1,019,570
                                        -----------    ----------    ------------    -----------
Net Proceeds..........................           --            --              --             --
Percentage attributable to Royalty....         90.0%         90.0%           90.0%          90.0%
                                        -----------    ----------    ------------    -----------
Amounts payable attributable to
  Royalty.............................           --            --              --             --
Percentage attributable to the
  Trust...............................         99.9%         99.9%           99.9%          99.9%
                                        -----------    ----------    ------------    -----------
Royalty Proceeds......................           --            --              --             --
Trust administrative expenses(4)......     (135,042)      (88,440)       (307,378)      (319,982)
                                        -----------    ----------    ------------    -----------
                                           (135,042)      (88,440)       (307,378)      (319,982)
Interest income.......................       20,597        20,698          58,824         61,074
Reserve for future Trust
  expenses(5).........................      114,445        67,742         248,554        258,908
                                        -----------    ----------    ------------    -----------
Distributable cash....................  $        --    $       --    $         --    $        --
                                        ===========    ==========    ============    ===========
</TABLE>
 
---------------
 
(1) Represents amounts received by the Working Interest Owner during the three
     and nine month periods ended in August 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 $202,345 and $371,692 for the three and nine month periods of
     1997, respectively.
 
(3) Recoveries represent Class A costs incurred in prior periods and recovered
     in current period; carry-forwards represent Class A costs incurred in the
     applicable periods that remained outstanding as of the end of such periods.
 
(4) Increase in 1997 third quarter reflects timing of payment of liabilities
     incurred in 1997 second quarter.
 
(5) Represents withdrawals from the Trust administrative expense reserve during
     the respective periods.
 
                                     --11--
<PAGE>   12
 
     Gross Proceeds, which includes gas and oil revenues, are calculated based
on amounts received by the Working Interest Owner. Operating information
follows:
 
<TABLE>
<CAPTION>
                                                   THIRD QUARTER              NINE MONTHS
                                               ---------------------     ---------------------
                                                 1997         1996         1997         1996
                                               --------     --------     --------     --------
<S>                                            <C>          <C>          <C>          <C>
Natural Gas
  Revenues (in millions).....................   $  0.3       $  0.7       $  1.2       $  2.0
  Sales volumes (in million cubic feet)......      146          268          444          805
  Average realization (per thousand cubic
     feet)...................................   $ 2.23       $ 2.47       $ 2.63       $ 2.46
Oil
  Revenues (in millions).....................   $  0.3       $  0.4       $  1.1       $  1.0
  Sales volumes (in thousands of barrels)....     15.4         20.8         50.0         56.3
  Average realization (per barrel)...........   $18.47       $19.71       $21.20       $18.23
</TABLE>
 
     Gas volumes for the 1997 periods decreased from 1996 levels because of the
substantial depletion of East Cameron Block 336 in mid-1996 and High Island
Block 552 in late 1996 and normal production declines on the remaining producing
properties. Oil volumes for the 1997 periods decreased because of normal
production declines. Revenues for the nine-month period of 1997 benefited from
an increase in average realizations reflecting the rise in natural gas and oil
market prices during that period.
 
     Costs consist of the following (in millions):
 
<TABLE>
<CAPTION>
                                                      THIRD QUARTER      NINE MONTHS
                                                      -------------     --------------
                                                      1997     1996     1997      1996
                                                      ----     ----     -----     ----
<S>                                                   <C>      <C>      <C>       <C>
Lease operating expenses............................  $0.4     $0.5     $ 0.6     $1.9
Exploration and development costs...................   4.4      0.3      10.8      1.6
Abandonment costs withheld and other................   0.1      0.1       0.5      0.5
                                                      ----     ----     -----     ----
                                                      $4.9     $0.9     $11.9     $4.0
                                                      ====     ====     =====     ====
</TABLE>
 
     Lower lease operating expenses for the third-quarter and nine-month periods
of 1997 resulted from several properties ceasing production and a downward
revision of accrued insurance costs. Third-quarter and nine-month 1997
exploration and development costs primarily relate to development at West
Cameron Block 498. Exploration and development costs for the 1996 periods
consisted primarily of exploration and development costs at Vermilion Block 58
and West Cameron Block 498. Abandonment costs are accrued each period based on
the estimate of costs required to abandon the Trust's properties.
 
                                     --12--
<PAGE>   13
 
                          PART II.  OTHER INFORMATION
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 
<TABLE>
<CAPTION>
         EXHIBIT NO.                            DESCRIPTION
         -----------                            -----------
<S>      <C>            <C>
(a)         27          Financial Data Schedule
(b)                     Reports on Form 8-K:
</TABLE>
 
       No reports on Form 8-K were filed by the registrant during the third
       quarter of 1997.
 
                                     --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.
 
<TABLE>
<S>                                                      <C>
                                                         FREEPORT-McMoRan OIL AND GAS
                                                         ROYALTY TRUST
 
                                                         By: Texas Commerce Bank National Association,
                                                               Trustee
 
                                                                    By:           /s/  PETE
                                                                            FOSTER
                                                         --------------------------------------------
                                                                          PETE FOSTER
                                                            SENIOR VICE PRESIDENT AND TRUST OFFICER
</TABLE>
 
Date: November 13, 1997
 
                                     --14--
<PAGE>   15
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
      EXHIBIT NO.                                 DESCRIPTION
      -----------                                 -----------
<C>                       <S>
 
           27             -- Financial Data Schedule
</TABLE>