<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, 1999.

                                       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...............    9

  Item 2.  Management's Discussion and Analysis of Financial
     Condition and Results of Operations....................    10

Part II.  Other Information

  Item 6.  Exhibits and Reports on Form 8-K.................    14

Signature...................................................    15
</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,
                                            -------------------------   --------------------------
                                               1999          1998          1999           1998
                                            -----------   -----------   -----------    -----------
<S>                                         <C>           <C>           <C>            <C>
Royalty proceeds..........................  $        --   $        --   $        --    $        --
Trust administrative expenses.............      (89,438)     (126,010)     (431,553)      (289,994)
Interest income...........................       11,954        17,870        39,072         56,099
Reserve for future Trust expenses.........       77,484       108,140       392,481        233,895
                                            -----------   -----------   -----------    -----------
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,
                                                                  1999             1998
                                                              -------------    -------------
                           ASSETS                              (UNAUDITED)
<S>                                                           <C>              <C>
Cash and short-term investments.............................  $   1,014,122    $   1,406,603
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......................................  $   1,014,122    $   1,406,603
                                                              =============    =============
                LIABILITIES AND TRUST CORPUS
Reserve for future Trust expenses...........................      1,014,122    $   1,406,603
Trust corpus (14,975,390 Units of Beneficial Interest
  authorized,
  issued and outstanding)...................................             --               --
                                                              -------------    -------------
          Total liabilities and trust corpus................  $   1,014,122    $   1,406,603
                                                              =============    =============
</TABLE>

                     STATEMENTS OF CHANGES IN TRUST CORPUS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30,
                                                              -----------------------
                                                                1999         1998
                                                              --------    -----------
<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. There were no cash
receipts 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 Unit holder proposal to amend the Trust Indenture to extend the life
of the Trust for at least another two years. Any such amendment of the Trust
Indenture requires the written approval of the Trustee as well as approval of
the Unit holders. IMC Global Inc. (IMC), the successor to FTX's working
interests burdened by the Royalty, has filed a declaratory judgment action
seeking to prevent the Trustee from approving the amendment. The Trustee has
indicated that it will take no action to approve the amendment until such time
as the lawsuit is resolved. The Trustee will vigorously defend against the
lawsuit, but if IMC prevails in its lawsuit, the amendment will not be effected
and the Trustee will endeavor to sell the Royalty as soon as practicable for
cash to the highest bidder and terminate the Trust in accordance with the terms
of the Trust Indenture. See "Termination of the Trust." The Trustee will as
promptly as possible distribute the proceeds of any such sale 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 Conveyance provides for a Class A cost carry-forward for any month in
which the Class A costs (including those carried forward from previous months)
exceed the gross proceeds realized from the subject properties. As of September
30, 1999, this Class A cost carry-forward was $22.4 million. (See additional
information in Note 4.) This cost carry-forward must be recouped by the Working
Interest Owner before any Royalty payment will be made to the Trust. There is no
guarantee that the sale of future production will result in proceeds in excess
of the cost carry-forward and other expenses. As a result, whether or not the
Trust is terminated, there may be no further Royalty payments to the Trust.
Based on a study of the proved oil and gas

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

reserves attributable to the Royalty Properties as of December 31, 1998 made by
Ryder Scott Company Petroleum Engineers (Ryder Scott), independent petroleum
engineers, there were no estimated proved oil and gas reserve quantities or
related discounted future net cash flows attributable to the Trust at December
31, 1998 after considering the impact of the Class A cost carry-forward. The
Ryder Scott estimates were prepared in accordance with regulations of the
Securities and Exchange Commission and were limited to reserves classified as
"proved" as of December 31, 1998. The Trust's Annual Report on Form 10-K
includes a letter of Ryder Scott relating to its estimates and information
regarding the assumptions used by Ryder Scott in preparing its reserve study. It
also includes cautionary paragraphs that should be studied carefully together
with the estimates in the letter.

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 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. BASIS OF PRESENTATIONS

     The Trust's financial statements, which reflect the Trust's 99.9 percent
interest in the Partnership as though the Partnership did not exist, 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 was $0 at September 30, 1999. Neither the
initial nor the September 30, 1999 carrying value is necessarily indicative of
the fair market value of the Royalty held by the Trust.

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

     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.

4. DISTRIBUTIONS TO UNIT HOLDERS

     As a result of the capital cost incurred in recent years, a cumulative
excess Class A cost carry-forward of $22,421,107 existed as of September 30,
1999. This carry-forward is subject to and includes an interest factor at the
prime rate, which totaled $1,555,566, net to the Trust during the nine month
period ended September 30, 1999. This excess Class A cost carry-forward,
including the interest factor, must be recouped out of future Gross Proceeds
before there is a resumption of Royalty payments to the Trust.

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. Instead, the Working Interest Owner is 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, 1999 (on a cash basis prior to
the settlement described below), the Trust currently has minimal quantities of
gas remaining unrecovered pursuant to such gas balancing arrangements. 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.

     During the month of June 1999, the Working Interest Owner received
approximately $1.7 million in settlement for the gas imbalances in West Cameron
Block 215, Breton Sound Block 55 and Vermilion Block 58 of approximately 1.2
billion cubic feet (bcf) incurred prior to January 1, 1999. Such amounts have
been reflected in the Class A cost carry-forward for the third quarter 1999.

6. 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 during the time there is a
Class A cost deficit, the Trustee, in accordance with the Trust Indenture,
established an expense reserve of $2.4 million, of which $1,014,122 remained as
of September 30, 1999. Because of the cumulative excess Class A cost
carry-forward (Note 1), no Royalty payments were received, and $392,481, net of
interest income was withdrawn from the expense reserve to pay Trust
administrative expenses during the first nine months of 1999.

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

     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 1999 was
4.47 percent.

7. FEDERAL INCOME TAX MATTERS

     Unit holders are required to report taxable income for any Royalty income
received by the Trust and interest on the Trust's cash reserves, even if no
distributions are received by the Unit holders. Unit holders will have future
income tax deductions as additional administrative expenses are incurred and
paid with funds deposited in the expense reserve established for Trust
administrative expenses described in Note 6 above.

8. RESERVE FOR FUTURE 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, operations or
technology. As of September 30, 1999, the remaining aggregate abandonment costs,
as estimated by the operator of the Trust's properties, to be incurred for all
of the Trust's properties totaled $5.2 million net to the Trust, all of which
has been withheld from distributions to the Trust. During the third quarter the
Class A cost carryforward was reduced by $3,989,615 for the reversal of
abandonment costs previously accrued for West Cameron Block 215, Vermilion Block
58 and Breton Sound Block 55. The Working Interest Owner assigned its ownership
in these properties to the operators of the properties in exchange for the
operator's assuming all duties and obligations with respect to the assigned
interest including abandonment obligations. Any further adjustments to estimated
abandonment costs or variances to actual costs will be taken into account in
computing future Net Proceeds.

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 1998 the Working
Interest Owner did not deliver the minimum volume under the agreement.
Therefore, in February 1999 the pipeline company billed the Working Interest
Owner approximately $687,000 for the 1998 deficiency. The Working Interest Owner
paid the amount due the pipeline company in July 1999.

10. NEW YORK STOCK EXCHANGE NOTIFICATION

     On August 24, 1999 the New York Stock Exchange notified the Trustee that
the Trust had fallen below the continued listing standards of the Exchange. The
Trustee sent an inquiry letter to the Exchange to determine whether, in light of
the unique circumstances surrounding the Trust, the Exchange would grant the
Trust an extension with respect to the continued listing criteria. The Exchange
did not grant the Trust such an
                                      --7--
<PAGE>   8
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

extension, the Units were deleted and are no longer eligible for trading on the
New York Stock Exchange. The units now trade in the over the counter market
under the symbol FMOLS.

11. ASSIGNMENT OF INTEREST

     As mentioned above under "Reserve for Future Abandonment Costs," on August
30, 1999 the Working Interest Owner assigned its ownership interest in Vermilion
Blocks 21/22 and paid $297,500 to the operator in exchange for the operator
assuming all duties and obligations with respect to the assigned interest and
existing wells and platforms. The assignment was effective April 1, 1999. A
final settlement will occur within 45 days after August 30, 1999 to allocate
income and expenses attributable to the assigned interest subsequent to the
effective date.

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

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

     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, 1998, WHICH ARE CONTAINED IN ITS ANNUAL REPORT ON FORM 10-K
FOR 1998.

                                      --8--
<PAGE>   9

                   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,
1999, and the related statements of royalty proceeds and distributable cash and
changes in trust corpus for the three and nine month periods ended September 30,
1999 and 1998. These financial statements are the responsibility of the Trustee.

     We conducted our review 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 conducted 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.

     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 generally accepted accounting principles.

     Based on our review, 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, 1998 and, in our
report dated April 5, 1999, we expressed an unqualified opinion on that
statement.

                                          ARTHUR ANDERSEN LLP

Houston, Texas
November 12, 1999

                                      --9--
<PAGE>   10

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. 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, government
regulations and other matters beyond the control of the Trustee and the Working
Interest Owner.

     The Trust Indenture provides that the Trustee must sell the Trust's
interest in the Partnership, or cause the Partnership to sell the Royalty, if
the Trust receives less than $3 million in cash in each of three consecutive
years. The Trust received no cash in 1996, 1997 or 1998. Therefore, unless the
amendment of the Trust Indenture approved by the Unit holders is effected, the
Trustee will endeavor to effect such sale. At a special meeting of the Unit
holders held on March 12, 1999, the Unit holders of the Trust approved a Unit
holder proposal to amend the Trust Indenture to extend the life of the Trust for
at least another two years. Any such amendment of the Trust Indenture requires,
in addition to the requisite vote of the Unit holders, the written approval of
the Trustee. The Working Interest Owner has filed a declaratory judgment action
seeking to enjoin the Trustee from approving the amendment. The Trustee will
take no action to approve the amendment until such time as the lawsuit is
resolved. The Trustee will vigorously defend against the lawsuit, but if the
Working Interest Owner prevails in its lawsuit, the amendment will not be
effected and the Trustee will endeavor to sell the Royalty as soon as
practicable for cash to the highest bidder and terminate the Trust in accordance
with the terms of the Trust Indenture. Although the Trustee will endeavor to
offer the Royalty pursuant to procedures intended to maximize the proceeds to
the Trust, the Trustee can give no assurance regarding the amounts, if any, to
be realized as a result of such offer. It is the Trustee's intention to approve
the amendment if the lawsuit is resolved in a manner that permits the Trustee to
do so.

OPERATIONAL ACTIVITIES

     On May 19, 1999 the Working Interest Owner assigned its ownership interest
in West Cameron Block 215, Breton Sound Block 55 and Vermilion Block 58 to the
operator of such properties in exchange for the operator's assuming all duties
and obligations with respect to the assigned interest and existing wells and
platforms. The assignment was effective January 1, 1999.

                                     --10--
<PAGE>   11

RESULTS OF OPERATIONS

     There were no cash distributions to the Unit holders during the first nine
months of 1999 or 1998. During the three months and nine months period ended
September 30, 1999, Gross Proceeds exceeded Total Costs by approximately $6.1
million and $3.6 million, respectively. Gross Proceeds exceeded Total Costs
primarily due to the settlement of gas imbalances of $1.7 million recorded as
Gross Proceeds and the reversal of previously accrued plug and abandonment cost
of approximately $4.4 million included in Total Costs. These transactions were
between the Working Interest Owner and Amerada Hess in connection with the
Working Interest Owner's assignment of West Cameron Block 215, Vermilion Block
58 and Breton Sound Block 55 to Amerada Hess, the operator of the properties. As
a result, the Class A cost carry-forward decreased to $22.4 million (Note 4) net
to the Trust as of September 30, 1999. Because of the Class A cost
carry-forward, Trust administrative expenses were paid from the expense reserve
during the 1999 and 1998 periods. The calculation of distributable cash for each
period follows:

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED           NINE MONTHS ENDED
                                                 SEPTEMBER 30,               SEPTEMBER 30,
                                           -------------------------   --------------------------
                                              1999          1998          1999           1998
                                           -----------   -----------   -----------   ------------
<S>                                        <C>           <C>           <C>           <C>
Gross Proceeds(1)........................  $ 2,298,241   $ 3,830,172   $ 4,854,571   $  9,138,615
Total Costs(2)...........................    3,812,932    (5,749,455)   (1,289,047)   (15,732,625)
Excess Class A cost (recovery)
  carry-forward, net(3)..................   (6,111,173)    1,919,283    (3,565,524)     6,594,010
                                           -----------   -----------   -----------   ------------
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............      (89,438)     (126,010)     (431,553)      (289,994)
                                           -----------   -----------   -----------   ------------
                                               (89,438)     (126,010)     (431,553)      (289,994)
Interest income..........................       11,954        17,870        39,072         56,099
Reserve for future Trust expenses(4).....       77,484       108,140       392,481        233,895
                                           -----------   -----------   -----------   ------------
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 $581,465 and $1,730,137 for the three and nine months during
     1999 and $478,630 and $1,291,319 for the three and nine months during 1998.

(3) Represents Class A costs incurred in the applicable period that remained
     outstanding as of the end of such period.

(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>
                                                   THIRD QUARTER              NINE MONTHS
                                               ---------------------     ---------------------
                                                 1999         1998         1999         1998
                                               --------     --------     --------     --------
<S>                                            <C>          <C>          <C>          <C>
Natural Gas
  Revenues (in millions).....................   $  1.8       $  1.4       $  3.3       $  4.1
  Sales volumes (in million cubic feet)......    1,331          639        2,073        1,779
  Average realization (per thousand cubic
     feet)...................................   $ 1.39       $ 2.25       $ 1.57       $ 2.30
Oil
  Revenues (in millions).....................   $  0.5       $  2.4       $  1.6       $    5
  Sales volumes (in thousands of barrels)....     37.1        178.4        134.8        351.5
  Average realization (per barrel)...........   $12.13       $13.39       $11.84       $14.34
</TABLE>

     Gas volumes for the three months ended September 30, 1999 increased
significantly over the 1998 period because of the settlement of the gas
imbalances for West Cameron Block 215, Vermilion Block 58 and Breton Sound Block
55. The increases were partially offset by normal production declines on the
remaining properties. Gas revenue for the nine months ended September 30, 1999
were significantly below the 1998 period due to the decrease in gas prices
realized. Oil volumes for the three months and nine months ended September 30,
1999 period decreased significantly over the 1998 periods because of mechanical
problems and well performance at West Cameron Block 498 and normal production
declines on the remaining properties.

     Costs consist of the following (in millions):

<TABLE>
<CAPTION>
                                                      THIRD QUARTER              NINE MONTHS
                                                  ---------------------     ---------------------
                                                    1999         1998         1999         1998
                                                  --------     --------     --------     --------
<S>                                               <C>          <C>          <C>          <C>
Lease operating expenses........................  $   0.03       $1.4       $   2.64      $ 2.7
Exploration and development costs...............      0.01        3.7            1.4       11.3
Interest, abandonment costs withheld and
  other.........................................       0.6        0.6            1.7        1.7
Abandonment cost................................     (4.44)         0          (4.44)         0
                                                  --------       ----       --------      -----
                                                  $   (3.8)      $5.7       $    1.3      $15.7
                                                  ========       ====       ========      =====
</TABLE>

     Lease operating expenses and exploration and development costs for the 1999
periods decreased over the 1998 periods because the Working Interest Owner
assigned its interest in West Cameron Block 215, Vermilion Block 58 and Breton
Sound Block 55 to the operator, thereby reducing expenses. The Working Interest
Owner is currently discussing with the operator of High Island Block 552 amounts
billed of approximately $400,000. The Working Interest Owner believes these
costs to be excessive and has not paid the operator. The Working Interest Owner
has scheduled an audit to be conducted during the fourth quarter of 1999.
Development costs for 1999 relate primarily to the payment during 1999 of
invoices relating to 1998 in connection with the development at West Cameron
Bock 498. Development costs for 1998 also related to the development of West
Cameron Block 498.

     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.

                                     --12--
<PAGE>   13

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. Therefore, in February 1999 the pipeline
company billed the Working Interest Owner approximately $687,000 for the 1998
deficiency. The Working Interest Owner paid the amount due the pipeline company
in July 1999.

     On May 19, 1999 the Working Interest Owner assigned its ownership interest
in West Cameron Block 215, Breton Sound Block 55 and Vermilion Block 58 to the
operator in exchange for the operator assuming all duties and obligations with
respect to the assigned interest and existing wells and platforms. The
assignment was effective January 1, 1999. As a result of this transaction the
Working Interest Owner reversed the plug and abandonment accrual associated with
the assigned properties, which reduced the Class A cost-carryforward by
$3,989,615, net to the Trust.

     In a separate transaction, the Working Interest Owner received
approximately $1.7 million from the operator of the above listed properties in
settlement for the gas imbalances incurred prior to January 1, 1999.

     On August 30, 1999 the Working Interest Owner assigned its ownership
interest in Vermilion Blocks 21/22 and paid $297,500 to the operator in exchange
for the operator assuming all duties and obligations with respect to the
assigned interest and existing wells and platforms. The assignment was effective
April 1, 1999. A final settlement will occur within 45 days after August 30,
1999 to allocate income and expenses attributable to the assigned interest
subsequent to the effective date. The Working Interest Owner is reviewing all
options relating to its ownership interest in the remaining properties,
including discussions with several unitholders.

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 the Unit holders, upon termination of the Trust
and in certain other limited circumstances. However, the Trust is directed to
effect such a sale (without 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. At the beginning of 1999, the Unit holders approved an
amendment to the Trust Indenture to extend the life of the Trust for at least
another two years, but such amendment has not become effective because of
pending litigation. See Note 1 to the Trust's financial statements included
elsewhere in this report.

     The Trust's cash receipts last reached $3 million during 1995, and there
were no cash receipts in 1996, 1997, 1998 or 1999. The Class A cost
carry-forward has decreased to $22.4 million at September 30, 1999, primarily
from the result of the assignment of the above mentioned properties. This cost
carry-forward must be recouped by the Working Interest Owner before any
distribution may be made to the Trust. Since the Trust did not receive cash
receipts of at least $3 million in the three year period ended 1998, the Trust
will be terminated by one of the means described under "Termination of the
Trust" above, unless the amendment to the Trust Indenture approved by the
Unitholders on March 12, 1999 is implemented.

     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.

                                     --13--
<PAGE>   14

     Estimated future abandonment costs, based on current laws and regulations,
are accrued over the life of the Trust's properties (Note 8). As of September
30, 1999, the estimated remaining aggregate abandonment costs to be incurred for
all of the Trust's properties totaled $5.2 million net to the Trust, of which
all has been withheld from distributions to Unit holders. Any adjustments to the
estimated abandonment costs or variances will be taken into account in computing
future Net Proceeds.

     For the past several years, 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 6), of which
approximately $1.0 million remained at September 30, 1999.

                          PART II.  OTHER INFORMATION

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

  (a) Not applicable

  (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 1999.

                                     --14--
<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 BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

<TABLE>
<S>                                                      <C>
                                                         FREEPORT-McMoRan OIL AND GAS
                                                         ROYALTY TRUST

                                                         By: Chase Bank of Texas, National
                                                         Association,
                                                               Trustee

                                                                      By:/s/ MIKE ULRICH
                                                         ---------------------------------------------
                                                                          MIKE ULRICH
                                                            SENIOR VICE PRESIDENT AND TRUST OFFICER
</TABLE>

Date: November 15, 1999

                                     --15--
<PAGE>   16

                               INDEX TO EXHIBITS

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