<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 June 30, 2001.

                                       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.)

           THE CHASE MANHATTAN BANK, TRUSTEE                                     78701
                       700 LAVACA                                             (Zip Code)
                     AUSTIN, TEXAS
        (Address of principal executive offices)
</Table>

       Registrant's telephone number, including area code: (512) 479-2562

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

   (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
     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....................    9

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           SIX MONTHS ENDED
                                                                   JUNE 30,                    JUNE 30,
                                                           -------------------------   -------------------------
                                                              2001          2000          2001          2000
                                                           -----------   -----------   -----------   -----------
<S>                                                        <C>           <C>           <C>           <C>
Royalty proceeds.........................................  $        --   $        --   $        --   $        --
Trust administrative expenses............................     (144,350)     (100,649)     (251,150)     (175,263)
Interest income..........................................        4,068        10,773        11,330        21,384
Reserve for future Trust expenses........................      140,282        89,876       239,820       153,879
                                                           -----------   -----------   -----------   -----------
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>
                                                              JUNE 30, 2001   DECEMBER 31, 2000
                           ASSETS                             -------------   -----------------
                                                               (UNAUDITED)
<S>                                                           <C>             <C>

Cash and short-term investments.............................  $     375,639     $     615,459
Net overriding royalty interest in oil and gas properties...    189,875,741       189,875,741
Less, accumulated amortization of net overriding royalty
  interest..................................................   (189,875,741)     (189,875,741)
                                                              -------------     -------------
        Total assets........................................  $     375,639     $     615,459
                                                              =============     =============

                LIABILITIES AND TRUST CORPUS
Reserve for future Trust expenses...........................  $     375,639     $     615,459
Trust corpus (14,975,390 Units of Beneficial Interest
  authorized, issued and outstanding).......................             --                --
                                                              -------------     -------------
        Total liabilities and trust corpus..................  $     375,639     $     615,459
                                                              =============     =============
</Table>

                                      --3--
<PAGE>   4

                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST

                         NOTES TO FINANCIAL STATEMENTS
                                  (UNAUDITED)

1. BACKGROUND AND STATUS

     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." IMC Global Inc.
("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 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). The Trust is passive, with Chase Manhattan Bank 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 Unitholders representing a majority of the Units. The Trust
Indenture originally stated that the Trust must also terminate if the amount of
cash per year received by the Trust for each of three successive years
commencing after December 26, 1990 is less than $3 million. The Trust's cash
receipts were less than $3 million in 1996, 1997 and 1998. However, at a special
meeting of the Unitholders held on March 12, 1999, the Unitholders approved a
shareholder proposal to amend the Trust Indenture to extend the life of the
Trust for at least two years. This extension expired on December 31, 2000, as
there were no payments in respect of the Royalty during 1999 and 2000.
Therefore, the Trust Indenture provides the Trustee must sell the Trust's
interest in the Partnership or cause the Partnership to sell the Royalty.
Pursuant to a shareholder proposal, the trustee is working on proxy materials
and anticipates filing definitive proxy materials with a plan for distribution
of the Trust's assets.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The Trust's financial statements, which reflect the Trust's 99.9 percent
interest in the Partnership 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 accounting principles generally accepted in the United States, revenues
and expenses would be recognized on an accrual basis.
                                      --4--
<PAGE>   5
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     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 Trust considers all highly liquid investments purchased with a maturity
of three months or less to be cash equivalents. The Trust's expense reserve is
invested in certificates of deposit which mature every thirty days.

     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 June 30, 2001 and 2000. The carrying
value is not necessarily indicative of the fair market value of the Royalty held
by the Trust.

3. COST CARRYFORWARD

     As a result of the capital costs incurred in recent years, a cumulative
excess Class A cost carryforward of $15,094,877 existed as of June 30, 2001. The
cost carryforward is subject to and includes an interest amount at the prime
rate, which totaled $731,562 net to the Trust during the six month period ended
June 30, 2001. This excess Class A cost carryforward, including the interest
factor, must be recouped by the Working Interest Owner out of future Gross
Proceeds before distributions to the Unitholders can be resumed.

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, due to the lack of sufficient remaining reserves from which to makeup
any underproduction. As of June 30, 2001, 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. In addition, other factors
including the creditworthiness of the counter parties should be considered in
determining the probability and the amount of the future proceeds.

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

5. GAS CONTRACT SETTLEMENT

     The Working Interest Owner has brought suit against a prior gas purchaser
seeking reimbursement as excess royalty of a portion of amounts paid to the
Minerals Management Service (MMS). This is a result of the Working Interest
Owner's settlement of claims made by the MMS for additional royalty arising from
the Working Interest Owner's compromise of claims against the gas purchaser. The
Trust's interest in the proceeds of the gas contract settlement were included in
the Trust's Gross Proceeds and the funds paid to the MMS reduced the Trust's
Gross Proceeds. Discovery in this suit is proceeding and a trial date has been
set for August 28, 2001. The amount of any recovery with respect to this claim
is presently indeterminable. However, if the Working Interest Owner receives any
amount pursuant to this litigation, a portion of it will be treated as Gross
Proceeds.

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 approximately $.4 million remained as of June 30, 2001. During the first
six months of 2001, $.2 million was withdrawn from the expense reserve to pay
Trust administrative expenses. The funding for this reserve is deposited with
Chase Manhattan Bank and invested in Chase Manhattan Bank collateralized
certificates of deposit. The average interest rate earned on these funds for the
second quarter of 2001 and 2000 was 3.72 percent and 5.5 percent, respectively.
The expense reserve is established at the Trust level and is unrelated to the
items, including the cost carryforward, that are taken into account by the
Working Interest Owner in determining whether amounts are payable pursuant to
the Royalty.

7. FEDERAL INCOME TAX MATTERS

     The Trustee reports on the basis that the Trust is a grantor trust. As a
grantor trust, the Trust will incur no federal income tax liability. In
addition, it will incur little or no federal income tax liability if it is held
to be a non-grantor trust. If the Trust was held to be taxable as a corporation,
it would have to pay tax on its net taxable income at the corporate rate.

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. 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, government regulations, operation or
technology. As of June 30, 2001, 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 taken into account in computing the cost
carryforward.
                                      --6--
<PAGE>   7
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. TRANSPORTATION AGREEMENT

     In December 1997, the Working Interest Owner entered into a crude oil
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 2000 the
Working Interest Owner did not deliver the minimum volume under the agreement.
Therefore, in 2001 the pipeline company billed the Working Interest Owner
approximately $0.5 million for the 2000 deficiency. This amount was taken into
account in computing the Class A cost carryforward of $15.0 million at June 30,
2001. Based on 2001 projected production the minimum delivery volumes will not
be met in 2001 and the Working Interest Owner expects a deficiency assessment of
approximately $.2 million in 2001. However should production exceed the 2001
minimum, the Working Interest Owner is entitled to receive transportation
without pay up to the cumulative prior undelivered volumes of 1.1 million
barrels.

     THE INFORMATION HEREIN SHOULD BE READ IN CONJUNCTION WITH THE
FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST FINANCIAL STATEMENTS FOR THE YEAR
ENDED DECEMBER 31, 2000, WHICH ARE CONTAINED IN ITS ANNUAL REPORT ON FORM 10-K
FOR 2000.

                                      --7--
<PAGE>   8

                   FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Chase Manhattan Bank (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 June 30, 2001,
and the related statements of royalty proceeds and distributable cash for the
three-month and six-month periods ended June 30, 2001 and 2000. 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 2, 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.

                                          ARTHUR ANDERSEN LLP

Houston, Texas
August 6, 2001

                                      --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.

     Early in December 2000, the Trustee was approached by representatives of
Roberson Oil Company and IMC Global, Inc. (IMC), the Working Interest Owner,
proposing a transaction whereby a to-be-formed corporation (NewCo) would
purchase the Trust assets and the working interest from IMC. Thereafter, NewCo
would conduct an exchange offer whereby Unitholders would be offered the
opportunity to exchange, based on terms and conditions established by NewCo,
their Units in the Trust for shares in NewCo. The Trustee has received a
Unitholder proposal that would amend the Trust Indenture to allow the
transaction to proceed if the proposal receives the requisite vote of the
Unitholders. The Trustee prepared proxy materials for a special meeting of the
Unitholders at which time the Unitholders will vote on a proposal to authorize
the Trustee to conduct a sale of the Trust's Royalty for nominal consideration
in accordance with the plan described above. The preliminary proxy materials
were filed with the Securities and Exchange Commission (SEC) on April 4, 2001.
The Trustee is currently waiting on comments from the SEC staff.

     Once the definitive proxy materials are filed and a Unitholders meeting is
set, if a majority of the Unitholders entitled to vote at the meeting, in which
a quorum is present, vote to authorize the Trustee to sell the Trust's assets to
NewCo, the Trustee will do so. If the sale to NewCo is not approved, the Trustee
will proceed to conduct an auction of the Trust properties in accordance with
the existing terms of the Trust Indenture. Complete information concerning the
vote will be provided to the Unitholders in the forthcoming proxy materials.

     During the second quarter of 2001, the Class A cost carryforward decreased
by $2.3 million, from $17.3 million at March 31, 2001, to $15.0 million at June
30, 2001. There were no proved reserve quantities and related discounted cash
flows attributable to the Trust as of December 31, 2000. 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, 2000, 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

                                      --9--
<PAGE>   10

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 less than the cumulative excess Class A cost carryforward. 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.

     As noted, there has been a reduction in the cost carryforward during 2001.
The Trustee cannot predict whether the oil and gas properties will produce
sufficient quantities of oil and gas in the future to eliminate the cost
carryforward altogether (in which case Royalties would again be payable). The
Ryder Scott report prepared at year-end 2000 indicated that the production from
proved reserves would decline over time and that a substantial percentage of the
remaining production from proved reserves on the oil and gas properties burdened
by the Royalty would be attributable to production during 2001. Changes in
hydrocarbon prices subsequent to December 31, 2000 were not taken into account
in the Ryder Scott report. It is possible (if not likely) that, as production
from the Working Interests declines, the rate at which the cost carryforward is
reduced will decline, and it is possible (if not likely) that the cost
carryforward will never be eliminated, in which case there would never be
payments in respect of the Royalty. Although no interim report has been
prepared, the proved reserves have been depleted by production from the Working
Interests that has generated $8.57 million in total revenue to the Royalty in
2001 through June. Therefore, although the Trustee cannot quantify any reduction
in the revenues at this time, it is very likely that the amount of future net
revenue of the Royalty has declined since the time of the Ryder Scott report on
December 31, 2000. In any event, the Trustee believes that, based on the
information in the Ryder Scott report, the appraisal prepared early last year by
Albrecht & Associates and the terms of the proposed transaction between the
Working Interest Owner and TXS, it is not unreasonable to conclude that there is
little or no chance that additional payments will ever be made with respect to
the Royalty. Nevertheless, an auction of the Royalty would likely produce the
best evidence of the Royalty's value or lack thereof, and if the Shareholder
Proposal is approved, no such auction will take place.

RESULTS OF OPERATIONS

     There were no cash distributions to Unitholders during the first six months
of 2001 or 2000. No cash distributions have been made since 1995. During the
second quarter of 2001, Gross Proceeds exceeded total costs by approximately
$2.5 million, primarily because of higher oil and gas prices received. As a
result, the Class A cost carryforward decreased to $15.0 million net to the
Trust as of June 30, 2001. Since mid-1995, the

                                      --10--
<PAGE>   11

trust administrative expenses have been paid from the expense reserve. The
calculation of distributable cash for each year follows:

<Table>
<Caption>
                                              THREE MONTHS ENDED           SIX MONTHS ENDED
                                                    JUNE 30                     JUNE 30
                                           -------------------------   -------------------------
                                              2001          2000          2001          2000
                                           -----------   -----------   -----------   -----------
<S>                                        <C>           <C>           <C>           <C>
Gross Proceeds(1)........................  $ 3,860,072   $ 2,721,953   $ 8,373,151   $ 5,494,322
Total Costs(2)...........................   (1,356,987)   (2,168,730)   (3,189,251)   (2,909,105)
Excess Class A cost carryforward(3)......   (2,503,085)     (553,223)   (5,183,900)   (2,585,217)
                                           -----------   -----------   -----------   -----------
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............     (144,350)     (100,649)     (251,150)     (175,263)
                                           -----------   -----------   -----------   -----------
                                              (144,350)     (100,649)     (251,150)     (175,263)
Interest income..........................        4,068        10,773        11,330        21,384
Reserve for future Trust expenses(4).....      140,282        89,876       239,820       153,879
                                           -----------   -----------   -----------   -----------
Distributable cash.......................  $        --   $        --   $        --   $        --
                                           ===========   ===========   ===========   ===========
</Table>

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

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

(2) Represents amounts accrued by the Working Interest Owner during the three
    and six month periods ended in May of such year. Includes accrued interest
    of $340,108 and $813,661 for the three and six months during 2001 and
    $512,449 and $1,031,370 for the three and six months during 2000.

(3) Represents Class A costs in excess of Gross Proceeds (Gross Proceeds in
    excess of Class A costs) in the applicable periods.

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

                                      --11--
<PAGE>   12

     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       SIX MONTHS
                                                                  ENDED             ENDED
                                                                JUNE 30,          JUNE 30,
                                                             ---------------   ---------------
                                                              2001     2000     2001     2000
                                                             ------   ------   ------   ------
<S>                                                          <C>      <C>      <C>      <C>
Natural Gas
  Revenues (in millions)...................................  $  1.9   $  0.8   $  3.5   $  1.1
  Sales volumes (in million cubic feet)....................     246      284      537      339
  Average realization (per thousand cubic feet)............  $ 7.78   $ 2.68   $ 6.54   $ 2.66
Oil
  Revenue (in millions)....................................  $  1.9   $  1.9   $  4.9   $  4.4
  Sales volumes (in thousands of barrels)..................    67.5     65.4    162.5    157.4
  Average realization (per barrel).........................  $28.76   $29.68   $29.89   $28.18
</Table>

     Gas revenue increased significantly for the second quarter and first half
of 2001 due to a sharp increase in gas prices. Volume increases achieved in the
first quarter of 2001 due to previous well workovers have leveled out and are
falling due to normal reserve decline. Oil revenues held fairly constant both in
price and volume. Costs consist of the following (in millions):

<Table>
<Caption>
                                                              THREE MONTHS    SIX MONTHS
                                                                  ENDED          ENDED
                                                                JUNE 30,       JUNE 30,
                                                              -------------   -----------
                                                              2001    2000    2001   2000
                                                              -----   -----   ----   ----
<S>                                                           <C>     <C>     <C>    <C>
Lease operating expenses....................................  $0.8    $1.3    $1.5   $0.5
Exploration and development costs...........................   0.3     0.3     0.9    1.3
Interest, abandonment costs withheld and other..............   0.3     0.6     0.8    1.1
                                                              ----    ----    ----   ----
                                                              $1.4    $2.2    $3.2   $2.9
                                                              ====    ====    ====   ====
</Table>

     Costs for the second quarter were down for 2001. Total costs for the first
six months were constant compared to the same time last year. Capital
expenditures fell due to fewer workover operations while lease operating
expenses for the first half 2001 increased due to maintenance needs.

     In December 1997, the Working Interest Owner entered into a crude oil
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 2000 the Working
Interest Owner did not deliver the minimum volume under the agreement.
Therefore, in February 2001, the pipeline company billed the Working Interest
Owner approximately $0.5 million for the 2000 deficiency. This amount was paid
and taken into account in computing the Class A cost carryforward in the second
quarter of 2001. Based on current production projected the minimum delivery

                                      --12--
<PAGE>   13

volumes will not be met in 2001. However, should production exceed the 2001
minimum the Working Interest Owner is entitled to receive transportation without
pay up to the cumulative prior undelivered volumes.

CAPITAL RESOURCES AND LIQUIDITY

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

     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.

     There are no exploration and development costs formally budgeted for 2001.
However, in the first quarter of 2001 the Operator of the West Cameron Block 498
installed additional water handling and compression equipment resulting in the
working interest owner incurring $0.9 million in development cost for the year.

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

     As of June 30, 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 taken into account in computing the cost
carryforward. 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 $0.4 million remained at June 30, 2001.

     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 Unitholders, upon termination of the Trust and
in certain other limited circumstances. However, the Trust Indenture also stated
that if the amount of cash per year received by the Trust for each of three
successive years, commencing after December 31, 1990, is less than $3 million,
the Trustee will sell (without any such vote) the Trust's interest in the
Partnership or cause the Partnership to sell the Royalty.

     The Trust's cash receipts were less than $3 million in 1996, 1997 and 1998.
However, at a special meeting of the Unitholders held on March 12, 1999, the
Unitholders approved a shareholder proposal to amend the Trust Indenture to
extend the life of the Trust for at least two years. This extension expired on
December 31, 2000. Therefore, the Trust Indenture provides the Trustee must sell
the Trust's interest in the Partnership or

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<PAGE>   14

cause the Partnership to sell the Royalty. The Trustee is currently
investigating alternatives to fulfill its responsibilities in that regard.


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<PAGE>   15

                                   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 of the
undersigned, thereunto duly authorized.

                                            FREEPORT-McMoRan OIL AND GAS
                                            ROYALTY TRUST

                                            By: The Chase Manhattan Bank,
                                                Trustee


                                            By: /s/ MIKE ULRICH
                                              ------------------------------


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