##### Table of Contents





SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      FORM 10-K
      (Mark One)
 þ
    ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF
    1934  For the Fiscal Year ended December 31, 2008
  OR
  o
    TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE 
         SECURITIES EXCHANGE ACT OF
    1934  Commission File
    Number: 1-8518
 LL&E ROYALTY
    TRUST
 (Exact name of registrant as
    specified in its charter)
  Texas(State or other jurisdiction
    of incorporation or organization)

76-6007940(I.R.S. Employer Identification
    No.)The Bank of New York Mellon Trust Company, N.A., Trustee
    Global Corporate Trust
    919 Congress Avenue
    Austin, Texas(Address of principal executive
    offices)

78701(Zip
    Code)   Registrants telephone number, including area code:
    1-800-852-1422
 Securities registered pursuant to Section 12(b) of the
    Act:
  Name of Each ExchangeTitle of Each Class

On Which RegisteredUnits of Beneficial Interest

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act: None
  o þ
  o þ
  o þ
  o o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ
  The Wall Street Journal
    Documents
    Incorporated by Reference: None




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##### Table of Contents





TABLE OF
    CONTENTS
   
 PagenumberPART IITEM  1   Business


1Introduction


1Terms and Operation of the Trust


2Creation and Operation of the Trust


2Termination of the Trust


2Timing of Liquidation


3Assets and Liabilities in the Process of
    Liquidation


3Terms of the Conveyances


4The Partnership


6Receipts and Payments


6Liabilities and Contingency Reserves


6The Royalties


7Overriding Royalties


7Fee Lands Royalties


9Analysis of the Working Interest Owners
    Calculation of the Royalties


9The Units


10Distributions and Income Computations


10Transfer of Units


11Periodic Reports


11Possible Requirement That Units Be Divested


11Liability of Unit Holders


12Voting by Unit Holders


13Certain State Law Considerations


13The Properties


13General


13Description of Productive Properties


14Description of the Fee Lands


15Oil and Gas Sales from the Productive
    Properties


16Oil Sales


16Gas and Liquids Sales


16Exploration and Development Activities


17Productive Properties


17Fee Lands


17Estimates of Petroleum Engineers


17September 30, 2008 Estimates


17Certain Factors Affecting Estimates


18Industry Conditions and Regulation


19Industry Conditions


19Regulation


20Tax Considerations to Owners of Units


20Federal Income Tax Considerations


20Reporting Requirements for Widely-Held Fixed
    Investment Trusts


27Available Trust Tax Information


28IDC Recapture Income to the Company on
    Distribution


28Backup Withholding


28Information Return Filing Requirements


29




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PagenumberState Tax Considerations


29Severance Taxes


31Ad Valorem Taxes


31Available Information


32ITEM  1A  Risk Factors


32ITEM  1B  Unresolved Staff
    Comments


35ITEM  2   Properties


35ITEM  3   Legal
    Proceedings


35ITEM  4   Submission of
    Matters to a Vote of Unit Holders


35PART IIITEM  5   Market for
    Registrants Common Equity, Related Unit Holder Matters and
    Issuer Purchases of Equity Securities


35ITEM  6   Selected
    Financial Data


36ITEM  7  
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations


36ITEM  7A  Quantitative and
    Qualitative Disclosures about Market Risk


42ITEM  8   Financial
    Statements and Supplementary Data


43ITEM  9   Changes in
    and Disagreements with Accountants on Accounting and Financial
    Disclosure


56ITEM  9A  Controls and
    Procedures


56ITEM  9B  Other
    Information


57PART IIIITEM  10   Directors,
    Executive Officers of the Registrant and Corporate Governance


57ITEM  11   Executive
    Compensation


57ITEM  12   Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters


57ITEM  13   Certain
    Relationships and Related Transactions, and Director
    Independence


58ITEM  14   Principal
    Accounting Fees and Services


58PART IVITEM  15   Exhibits,
    Financial Statement Schedules


58SIGNATURE


60EX-31EX-32    Form 10-K, Form 10-K,




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##### Table of Contents



PART I  Item 1.
    Business INTRODUCTION  1-800-852-1422.
        Form 10-K
   1




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TERMS AND
    OPERATION OF THE TRUST Creation
    and Operation of the Trust  Form 10-K,
       Termination
    of the Trust         2




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Timing of
    Liquidation   Assets
    and Liabilities in the Process of Liquidation    ASSETS

December 31, 2008Cash

$
62Net overriding royalty interests in oil and gas properties and
    3% royalty interests in fee lands


1,254,607Net assets in process of liquidation

$
1,254,669    3




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
    The Trusts estimated share of oil and gas reserve volumes
    at December 31, 2008, were derived from a reserve report
    prepared by Miller and Lents dated July 31, 2009, for the
    production period ending September 30, 2008, a copy of
    which is attached as Appendix A to this Report on
    Form 10-K.
    The estimated fair value does not include any amounts related to
    the Offshore Louisiana or Jay Field properties. The estimated
    share for these properties is not economical.
    Forward strip commodity prices on December 31, 2008.
    Includes approximately $500,000 of future abandonment costs and
    approximately $56,000 of excess production costs to be recouped
    by the Working Interest Owners, for the South Pass 89 property.
    Discount rate of 10%.
    Future income taxes were not taken into account.      Form 10-K Form 10-K.
   Terms of
    the Conveyances  Form 10-K.
   4




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Form 10-K,
   5




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##### Table of Contents



The
    Partnership   Receipts
    and Payments   Liabilities
    and Contingency Reserves     6




---



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THE
    ROYALTIES  Form 10-K.
 Overriding
    Royalties   7




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Property-by-Property
             8




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##### Table of Contents



Fee Lands
    Royalties   Analysis
    of the Working Interest Owners Calculation of the
    Royalties    Quarter
    ended December 31, 2008
  South


OffshoreJay Field


Pass 89


Louisiana


TotalRevenues:Liquids

$
10,097,091


$
727,410


$
848,618


$
11,673,119Natural gas


919,447



18,486



1,068,871



2,006,804$
11,016,538


$
745,896


$
1,917,489


$
13,679,923Amounts withheld in escrow










(1,917,489
)


(1,917,489
)Production costs and expenses(1)


(4,824,366
)


(193,720
)


(239,774
)


(5,257,860
)Capital expenditures


(3,556,069
)


(45,809
)


19,359



(3,582,519
)Net Proceeds

$
2,636,103


$
506,367


$
(220,415
)

$
2,922,055Overriding Royalties paid to the Trust(2)

$



$
37,239


$



$
37,239Fee Lands Royalties(3)














9,021Royalties paid to the Trust (Royalty revenue)













$
46,260  9




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##### Table of Contents



Year
    ended December 31, 2008
  South


OffshoreJay Field


Pass 89


Louisiana


TotalRevenues:Liquids

$
35,649,069


$
4,647,549


$
4,369,826


$
44,666,444Natural gas


2,637,542



400,601



4,747,521



7,785,664$
38,286,611


$
5,048,150


$
9,117,347


$
52,452,108Amounts withheld in escrow






(2,409,707
)


(9,117,347
)


(11,527,054
)Production costs and expenses(1)


(30,708,141
)


(553,424
)


(1,374,025
)


(32,635,590
)Capital expenditures


(14,179,789
)


(106,429
)


(1,635,943
)


(15,922,161
)Net Proceeds

$
(6,601,319
)

$
1,978,590


$
(3,009,968
)

$
(7,632,697
)Overriding Royalties paid to the Trust(2)

$



$
37,239


$



$
37,239Fee Lands Royalties(3)














204,741Other Proceeds Paid to the Trust(4)














436,548Royalties paid to the Trust (Royalty revenue)













$
678,528     (1)
    
    Interest earned on funds escrowed for estimated future
    dismantlement costs are reported as a reduction of production
    costs and expenses. Interest earned on all properties for the
    2008 Fourth Quarter and Twelve Months ending December 31,
    2008 was $276,340 and $849,044, respectively. Pursuant to the
    terms of the Trust Conveyances, interest earned on the escrowed
    funds for any month will be calculated at an interest rate equal
    to 80% of the median between the Prime Rate at the end of such
    month and the Prime Rate at the end of the preceding month.Processing fees earned on the South Pass 89 properties are shown
    as a reduction of production costs and expenses. For the 2008
    Fourth Quarter, production costs and expenses include processing
    fee income of $191,022. For the Twelve Months ending
    December 31, 2008, South Pass 89 processing fees earned
    were $885,610.(2)
    
    As a result of excess production costs incurred in one monthly
    operating period and then recovered in a subsequent monthly
    operating period(s), the Overriding Royalties paid to the Trust
    may not agree to the Trusts royalty interest in the Net
    Proceeds.(3)
    
    As a result of inquiries by the Trustee, the working interest
    owner recalculated its computation of the Fee Lands royalties
    and determined that the Trust was overpaid $25,165 during the
    third quarter 2008. In October and November 2008, royalty income
    was reduced by $16,925 and $8,240, respectively, to adjust for
    this overpayment.(4)
    
    In the first quarter 2008, the Trust received a single payment
    of $436,548 as a result of a review conducted by an independent
    oil and gas accounting firm retained by the Trustee to review
    the Working Interest Owners calculation of amounts
    relevant to the determination of the net proceeds properly
    payable to the Trust under the Conveyances.  THE
    UNITS Distributions
    and Income Computations   10




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Transfer
    of Units   Periodic
    Reports     Possible
    Requirement That Units Be Divested   11




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30-day over-the-counter 30-day
     Liability
    of Unit Holders   12




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Voting by
    Unit Holders     Certain
    State Law Considerations   THE
    PROPERTIES General  Form 10-K
   13




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Description
    of Productive Properties    ProductiveProperty and Year









Productive Wells(1)in Which



Acres


Oil


GasProduction Commenced

Location

Gross


Net


Gross


Net


Gross


NetJay Field (1970)(2)

Onshore


184,472
(3)


62,150
(3)


32



10.78



1



.34Alabamaand FloridaSouth Pass 89 (1982)

Offshore


5,000



1,250



2



0.50



0.00



0.00LouisianaOffshore Louisiana (1968)(4)

Offshore


10,000



1,625



6



0.75



10



1.55Louisiana


199,472



65,025



40



12.03



11



1.89     (1)
    
    Represent producing wells and wells capable of production. Net
    wells reflect the Working Interest Owners working
    interest. Gross and net wells exclude injection wells.(2)
    
    Includes interests in 23 leases which are a part of the Jay
    Field Unit created by a unit agreement originally among
    ExxonMobil (as operator) and others. The Jay Field is made up of
    177 different tracts of land. Portions of certain leases are
    located outside of the Jay Field Unit. The Overriding Royalties
    from the Jay Field burden only the portions of such leases
    included within the Jay Field Unit and owned by the Working
    Interest Owner as of June 28, 1983. In addition, certain
    minor interests of the Company in the Jay Field were not
    included in the Jay Field Productive Property. The information
    in the table above relates only to the portion of the Jay Field
    included in the Jay Field Productive Property. All right, title
    and interest of the Company in the Jay Field Productive Property
    was assigned to the following entities in the following
    undivided percentages on December 21, 2006, effective as of
    September 1, 2006:  Percentage ofthe WorkingInterest OwnedDesignation

by the OperatorsBlack Diamond Resources


3.9080
%QAB Carried WI, LP


1.6248
%QAC Carried WI, LP


2.8844
%Quantum Resources A1, LP


91.5828
%   Quantum Resources Management, LLC (Quantum) manages
    the Jay Field working interest on behalf of the above listed
    assignees. The Company will continue to account for and report
    on the remainder of the Properties other than the Jay Field
    Productive Properties.(3)
    
    Gross acres reflect aggregate porosity
    acre-feet in
    producing formations in the Jay Field, and net acres reflect the
    Working Interest Owners ownership interest in the
    producing formations as determined volumetrically for purposes
    of the unit agreement relating to the Jay Field. 14




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##### Table of Contents



(4)
    
    Includes four federal leases or federal units (as applicable)
    with designations, initial production dates and percentage
    ownership of the Working Interest Owner as follows:  Percentage ofthe WorkingDesignation and Initial

Interest OwnedProduction Date

by the OperatorsEast Cameron 195 Unit (1971)


33.33
%East Cameron 336, South Addition (1983)


20
%Eugene Island 261 (1979)


20
%South Marsh Island 76, South Addition (1968)


25
%Vermilion 331, South Addition (1977)


12.5
%   During the fourth quarter of 2001, the Working Interest Owner
    assigned its ownership in any future wells or existing well work
    activity at East Cameron 336 to other owners, but retained its
    share of the plugging and abandonment liability. Description
    of the Fee Lands       15




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OIL AND
    GAS SALES FROM THE PRODUCTIVE PROPERTIES   Oil
    Sales   Gas and
    Liquids Sales           16




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EXPLORATION
    AND DEVELOPMENT ACTIVITIES Productive
    Properties    Net WellsOil


Gas


Dry2006Exploratory










Development










2007Exploratory










Development










2008Exploratory










Development










     Jay
    Field
    South
    Pass 89
    Offshore
    Louisiana
   Fee
    Lands   ESTIMATES
    OF PETROLEUM ENGINEERS September 30,
    2008 Estimates     17




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Form 10-K.
  Net Proved Imputed Reserves and RevenuesCrude Oil,








Net RevenuesCondensate, and


Natural


Future Net


Discounted at 10%Natural Gas Liquids


Gas,


Revenues,


Per Year,Reserve Category

MBbls.


MMcf


M$


M$Proved Developed


72.1



120.6



8,673.7



6,542.6Proved Undeveloped


62.3



51.6



6,901.7



4,394.7Total Proved


134.4



172.2



15,575.4



10,937.3    Certain
    Factors Affecting Estimates     18




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Form 10-K.
   INDUSTRY
    CONDITIONS AND REGULATION Industry
    Conditions   19




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Regulation   TAX
    CONSIDERATIONS TO OWNERS OF UNITS Federal
    Income Tax Considerations  Introduction
      Rulings
    and Tax Opinion Regarding Distribution
               20




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Tax
    Consequences of Owning Units
      General Features of Grantor
    Trust Taxation.
 21




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##### Table of Contents



General Features of Partnership Taxation.
  i.e.
    Depletion Deductions.
     22




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##### Table of Contents



Trust Administrative Expenses.
  Classification of Trust Income.
    Alternative Minimum Tax for Corporations.
  Alternative Minimum Tax for Noncorporate
    Taxpayers.
   23




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##### Table of Contents



Abandonment Losses.
  Taxation of Nonresident Foreign Unit
    Holders.
  Form W-8ECI, Regulation Section 1.1441-4). Form W-
         24




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Sale of Units.
       25




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Reports.
  Audit of Partnership and
    Trust Returns.
    Accounting for Income and Deductions.
     26




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##### Table of Contents



Related Tax Effects on Unit Holders.
   Reporting
    Requirements for Widely-Held Fixed Investment Trusts   27




---



##### Table of Contents



Available
    Trust Tax Information    Other Possible Penalties.
 IDC
    Recapture Income to the Company on Distribution     Backup
    Withholding     28




---



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Nominee Reporting Requirements.
 Information
    Return Filing Requirements     State Tax
    Considerations    Louisiana
   29




---



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Florida
           30




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##### Table of Contents



Alabama
        paid-in-capital,
 Severance
    Taxes   Ad
    Valorem Taxes   31




---



##### Table of Contents



AVAILABLE
    INFORMATION  www.businesswire.com/cnn/lrt.htm http:www.sec.gov
  Item 1A.
    Risk
    Factors  Form 10-K
  The
    Trust terminated as of December 31, 2007 and is required to
    sell its assets and liquidate.
    The
    Trust will incur expenses in connection with the sale of its
    assets and liquidation.
    The
    sale of the Trusts assets will take a substantial amount
    of time.
    If the
    Trust has not sold its assets by December 31, 2010, the
    Trustee is required to sell the assets in a public
    auction.
    The
    market prices for oil and gas may not increase and may decline
    prior to the time the Trust enters into a binding agreement for
    the sale of the Trusts assets.
  and/or
  Natural
    gas and oil prices fluctuate due to a number of factors, and
    lower prices will reduce the market value of the Trusts
    assets.
  month-to-month
 32




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##### Table of Contents




    U.S. and worldwide economic conditions and expectations
    regarding future conditions and supply and demand;
    political conditions worldwide, in particular political
    disruption, war or other armed conflicts in oil producing
    regions;
    weather conditions;
    the supply and price of foreign natural gas and oil;
    the level of consumer demand;
    the price and availability of alternative fuels;
    the proximity to, and capacity of, transportation
    facilities; and
    the effect of worldwide energy conservation measures.      The
    Shut In of the Jay Field may have a material adverse effect on
    the value of the Trusts assets.
    Damage
    from Hurricanes Katrina and Rita has had a material adverse
    effect on the value of the Trusts assets.
    Pending
    litigation against the Working Interest Owner could adversely
    impact the value of the Trusts assets.
     33




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Increased
    production and development costs for the Overriding Royalties
    will decrease the value of the Trusts
    assets.
    Trust
    reserve estimates depend on many assumptions that may prove to
    be inaccurate, which could cause both estimated reserves and
    estimated future revenues to be too high.
    
    historical production from the area compared with production
    rates from similar producing areas;
    the assumed effect of governmental regulation; and
    assumptions about future commodity prices, production and
    development costs, severance and excise taxes, and capital
    expenditures.      Operating
    risks can adversely affect the value of the Trusts
    assets.
    Trust Unit
    holders and the Trustee have no control or influence over the
    operation or development of the Properties.
  Form 10-K.
  The
    operator may abandon any property, terminating the related
    Overriding Royalties.
   34




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##### Table of Contents



Unit
    holders have limited voting rights.
    Unit
    holders have limited ability to enforce the Trusts rights
    against the current or future owners of the
    Properties.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Unit Holders    PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Unit Holder
    Matters and Issuer Purchases of Equity Securities    2008 Quarter Ended


2007 Quarter EndedMarch 31


June 30


Sept. 30


Dec. 31


March 31


June 30


Sept. 30


Dec. 31Units of Beneficial Interest:High sales price

$
2.20


$
2.60


$
2.25


$
1.71


$
2.85


$
2.14


$
1.87


$
2.58Low sales price


1.73



1.88



1.58



0.49



1.95



1.49



1.10



1.40Distributions per Unit

$
0.0000


$
0.0000


$
0.0000


$
.0000


$
0.0272


$
0.0000


$
0.0000


$
.0334      35




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K.
      Years Ended December 31,2008


2007


2006


2005


2004Revenues

$
678,528


$
1,965,473


$
3,068,638


$
7,354,827


$
10,857,596Cash earnings


(331,921
)


634,378



2,094,226



6,586,512



10,178,621Cash distributions to Unit holders






1,150,481



1,831,080



6,002,945



10,177,500Cash distributions per Unit

$



$
0.0606


$
0.0964


$
0.3161


$
0.5359Trust Corpus

$
62


$
2,037,083


$
2,616,186


$
2,393,340


$
1,827,273   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Critical
    Accounting Policies
      out-of-pocket
  unit-of-production
         36




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Liquidity
    and Capital Resources
    Recent
    Developments
         37




---



##### Table of Contents



Form 10-K
  South
    Pass 89
    Offshore
    Properties:
  East
    Cameron 336
    East
    Cameron 195
    South
    Marsh Island 76
   38




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##### Table of Contents



Eugene
    Island 261
    Vermillion
    331
    Jay
    Field
    Other
    Reimbursements received by the Working Interest Owner due to
    lost production (which will be reported as Other Revenue) as
    follows:Offshore Louisiana PropertySouth Marsh Island 76 (Hurricane Rita)

$
1,275,000Reimbursements received by the Working Interest Owner for
    operating costs (which will be reported as a reduction to lease
    operating expense) as follows:South Pass 89SP 89B (Hurricane Katrina)

$
816,088SP 86C (Hurricane Katrina)

$
111,725Offshore Louisiana PropertyEast Cameron 195 (Hurricane Rita)

$
6,525,937South Marsh Island 76 (Hurricane Rita)

$
2,328,915Eugene Island 261 (Hurricane Rita)

$
52,160Vermillion 331 (Hurricane Rita)

$
206,259        39




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##### Table of Contents



Results
    of Operations
  Years Ended December 31,2008


2007


2006Royalty revenues

$
678,528


$
1,965,473


$
3,068,638Trust administrative expenses


(1,010,449
)


(1,331,095
)


(974,412
)Cash earnings

$
(331,921
)

$
634,378


$
2,094,226Changes in undistributed cash


331,921



516,103



(263,146
)Cash distributions

$



$
1,150,481


$
1,831,080Cash distributions per unit

$
0.0000


$
0.0606


$
0.0964Units outstanding


18,991,304



18,991,304



18,991,304        40




---



##### Table of Contents



Years Ended December 31,2008


2007


2006Net Proceeds:Revenues

$
52,452,108


$
29,574,488


$
30,199,489Amounts withheld in escrow


(11,527,054
)


(7,973,453
)


(2,096,559
)Production costs and expenses


(32,635,590
)


(27,468,852
)


(19,076,533
)Capital expenditures


(15,922,161
)


(2,417,881
)


(5,042,463
)Net Proceeds

$
(7,632,697
)

$
(8,285,698
)

$
3,983,934Royalties paid to the Trust:Overriding Royalties

$
37,239


$
1,566,221


$
2,726,914Fee Lands Royalties


204,741



399,252



341,724Other Proceeds paid to the Trust


436,548







Royalties paid to the Trust (Royalty revenues)

$
678,528


$
1,965,473


$
3,068,638     OffshoreJay Field


South Pass 89


Louisiana


TotalYear Ended December 31, 2007Oil & Condensate (MBbls)


23











23Gas (Mcf)


3











3Year Ended December 31, 2008Oil & Condensate (MBbls)














Gas (Mcf)














        41




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk   42




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  LL&E
    ROYALTY TRUST
 STATEMENTS
    OF CASH EARNINGS AND DISTRIBUTIONS
    Years Ended December 31, 2008, 2007 and 2006 2008


2007


2006Royalty revenues

$
678,528


$
1,965,473


$
3,068,638Trust administrative expenses


(1,010,449
)


(1,331,095
)


(974,412
)Cash earnings

$
(331,921
)

$
634,378


$
2,094,226Changes in undistributed cash


331,921



516,103



(263,146
)Cash distributions

$



$
1,150,481


$
1,831,080Cash distributions per unit

$
0.0000


$
0.0606


$
0.0964Units outstanding


18,991,304



18,991,304



18,991,304  STATEMENTS
    OF ASSETS, LIABILITIES AND TRUST CORPUS  December 31,
    2008 and 2007
  2008


2007ASSETSCash

$
62


$
331,983Net overriding royalty interests in productive oil and gas
    properties and 3% royalty interests in fee lands


76,282,000



76,282,000Less accumulated amortization


(76,282,000
)


(74,576,900
)Total assets

$
62


$
2,037,083LIABILITIES AND TRUST CORPUSTrust corpus (18,991,304 Units of Beneficial Interest
    authorized, issued and outstanding)

$
62


$
2,037,083Contingencies (note 8)Total liabilities and Trust corpus

$
62


$
2,037,083  STATEMENTS
    OF CHANGES IN TRUST CORPUS  Years
    Ended December 31, 2008, 2007 and 2006
  2008


2007


2006Trust corpus, beginning of period

$
2,037,083


$
2,616,186


$
2,393,340Cash earnings


(331,921
)


634,378



2,094,226Cash distributions






(1,150,481
)


(1,831,080
)Amortization of royalty interests


(1,705,100
)


(63,000
)


(40,300
)Trust corpus, end of period

$
62


$
2,037,083


$
2,616,186    43




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS
  December 31,
    2008, 2007 and 2006
  (1)
    Formation
    of the Trust        Trust Termination
         44




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
          Recent
    Developments
       45




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Form 10-K
  South
    Pass 89
    Offshore
    Properties:
  East
    Cameron 336
    East
    Cameron 195
    South
    Marsh Island 76
   46




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Eugene
    Island 261
    Vermillion
    331
    Other
          (2)
    Going
    Concern   47




---



##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    (3)
    Net
    Overriding Royalty Interests and Fee Lands Royalties  Property-by-Property
      (4)
    Basis of
    Presentation  Significant
    Accounting Policies
      out-of-pocket
  unit-of-production
 48




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
          (5)
    Federal
    Income Tax Matters       49




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      (6)
    Impairment        (7)
    Dismantlement
    Costs  Form 10-K
   50




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      (8)
    Contingencies      (9)  Supplemental
    Reserve Information (Unaudited)
     51




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Present
    Value of Estimated Future Net Revenues from Proved
    Reserves
  September 30,2008


2007


2006(In thousands)The Trusts proportionate share of future gross proceeds

$
39,136


$
42,836


$
116,277Less the Trusts proportionate share of  Future
    operating costs


(1,817
)


(1,691
)


(3,844
)Future capital costs


(5,348
)


(5,385
)


(10,103
)Excess production costs


(16,396
)


(10,637
)


(3,155
)Future royalty income


15,575



25,123



99,175Discount at 10% per annum


(4,638
)


(7,181
)


(49,207
)Standardized measure of future royalty income from proved oil
    and gas reserves

$
10,937


$
17,942


$
49,968   Changes
    in Imputed Proved Reserves and Present Value of Estimated Future
    Net Revenues
  Present ValueImputed


of Future NetProved Reserves


RevenuesLiquids


Gas


(Thousands(Mbbl)


(MMcf)


of dollars)Estimated at September 30, 2005


2,978



6,263


$
114,368Production


(35
)


(37
)

$
(3,069
)Revisions of estimates(1)


(1,389
)


(4,316
)


(72,768
)Extensions, discoveries and other additions










Accretion of discount


na



na



11,437Estimated at September 30, 2006


1,554



1,910


$
49,968Production


(23
)


(3
)

$
(1,965
)Revisions of estimates(1)


(1,237
)


(1,588
)


(35,058
)Extensions, discoveries and other additions










Accretion of discount


na



na



4,997Estimated at September 30, 2007


294



319


$
17,942Production









$
(679
)Revisions of estimates(1)


(160
)


(147
)


(8,120
)Extensions, discoveries and other additions










Accretion of discount


na



na



1,794Estimated at September 30, 2008


134



172


$
10,937       (1)
    
    Revisions of estimates are due to the interaction of a number of
    factors, including: (i) changes in prices being received;
    (ii) changes in estimates of operating, capital and
    dismantlement costs; (iii) changes in the timing and 52




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##### Table of Contents



LL&E
    ROYALTY TRUST
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  amounts of estimated future production; and (iv) changes in
    the estimated remaining imputed proved reserves. The Trust noted
    that for the year ended September 30, 2008, base prices
    were $101.61 per barrel for oil and $11.10 per MMBtu for gas.
    For the year ended September 30, 2007, base prices were
    $79.73 per barrel for oil, $6.66 per MMBtu for gas, and $69.81
    per barrel for natural gas liquids.  Recent
    SEC Rule-Making Activity
    
    commodity prices  economic producibility of reserves
    and discounted cash flows will be based on a
    12-month
    average commodity price unless contractual arrangements
    designate the price to be used;
    disclosure of unproved reserves  probable and
    possible reserves may be disclosed separately on a voluntary
    basis;
    proved undeveloped reserve guidelines  reserves may
    be classified as proved undeveloped if there is a high degree of
    confidence that the quantities will be recovered;
    reserve estimation using new technologies  reserves
    may be estimated through the use of reliable technology in
    addition to flow tests and production history; and
    non-traditional resources  the definition of oil and
    gas producing activities will expand and focus on the marketable
    product rather than the method of extraction.  Financial Accounting and Reporting
    by Oil and Gas Producing Companies, Disclosures about Oil and Gas Producing
    Activities
  Selected
    Quarterly Financial Data (Unaudited)
  Summarized Quarterly ResultsThree Months EndedMarch 31


June 30


September 30


December 312008:Royalty revenues

$
475,750


$
73,664


$
82,854


$
46,260Cash distributions

$



$



$



$
Cash distribution per unit

$
0.0000


$
0.0000


$
0.0000


$
0.00002007:Royalty revenues

$
673,875


$
295,085


$
163,563


$
832,950Cash distributions

$
515,732


$



$



$
634,749Cash distribution per unit

$
0.0272


$
0.0000


$
0.0000


$
0.0334  53




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm  
             /s/ KPMG
    54




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation of Controls and Procedures.
      Changes in Internal Control over Financial
    Reporting.
  Trustees Report on Internal Control over Financial
    Reporting. Rule 13a-15(f) Internal Control-Integrated Framework Internal Control-Integrated
    Framework,
   55




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##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers of the Registrant and Corporate
    Governance      Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  (a) Unit Ownership of Certain Beneficial Owners
    Number of


PercentageName

Units Reported


ReportedRobert E. Robotti(1)


1,074,298



5.7
%Kleinheinz Capital Partners, Inc.(2)


1,658,582



8.73
%     (1)
    
    Reference is hereby made to the Schedule 13D/A filed by the
    reporting person and others on February 9, 2009 for
    additional information regarding the reporting persons
    beneficial ownership of such Units. 56




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##### Table of Contents



(2)
    
    Reference is hereby made to the Schedule 13D filed by the
    reporting person and others on October 17, 2008 for
    additional information regarding the reporting persons
    beneficial ownership of such Units as of the date of such filing.  (b) Unit Ownership of Management
    (c) Change in Control
    (d) Securities Authorized for Issuance Under Equity
    Compensation Plans
    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services    2008


2007Audit fees(1)

$
351,000


$
355,000Audit related fees






Tax fees(2)


125,000



112,000All other fees






Total fees

$
476,000


$
467,000     (1)
    
    Audit fees consist of fees for the audit of the LL&E Trust
    financial statements and reimbursement for travel related
    expenses.(2)
    
    Tax fees consist of fees related to the LL&E Trusts
    tax information for its unit holders.  Pre-Approval
    Policies
   57




---



##### 



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  (a) Financial Statements
    
  PageNumberStatements of Cash Earnings and
    Distributions  Years Ended December 31, 2008,
    2007 and 2006


43Statements of Assets, Liabilities and
    Trust Corpus  December 31, 2008 and 2007


43Statements of Changes in
    Trust Corpus  Years Ended December 31,
    2008, 2007 and 2006


43Notes to Financial Statements


44Report of Independent Registered Public
    Accounting Firm


55    (b) Exhibits
  4*




Agreement for LL&E Royalty Trust, dated as of June 1,
    1983, between the Company and First City National Bank of
    Houston, as Trustee.28
.1*



Agreement of General Partnership of LL&E Royalty
    Partnership.28
.2*



Form of Conveyance of Overriding Royalty Interests for
    Fort Worth Basin Property.28
.3*



Form of Conveyance of Overriding Royalty Interests for Jay Field
    (Alabama) Property.28
.4*



Form of Conveyance of Overriding Royalty Interests for Jay Field
    (Florida) Property.28
.5*



Form of Conveyance of Overriding Royalty Interests for Offshore
    Louisiana Property.28
.6*



Form of Conveyance of Overriding Royalty Interests for South
    Pass 89 Property.28
.7*



Form of Royalty Deed.31




Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2003.32




Certification pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2003.     *
    
    Incorporated by reference to Exhibits of like designation to
    Registrants Annual Report on
    Form 10-K
    for the period ended December 31, 1983 (Commission File
    No. 1-8518).  (c) Financial Statement Schedules
   58




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##### Table of Contents



SIGNATURE    (Registrant)
  By:
    THE BANK OF NEW YORK MELLON TRUST COMPANY,
    N.A., Trustee   By:
    /s/  MIKE
    ULRICH   Vice President
  Note:
    Because the registrant is a trust without officers or employees,
    only the signature of an officer of the Trustee is available and
    has been provided. 59




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##### Table of Contents



Appendix A
    Miller and Lents Report
  
  July 31,
    2009
      Re:
    Estimates of Proved Reserves and          Net Proved Imputed Reserves and Revenues(1)(2)Crude Oil,








Net RevenuesCondensate, and


Natural


Future Net


Discounted at 10%Natural Gas Liquids,


Gas,


Revenues,


Per Year,Reserves Category

MBbls.


MMcf


M$


M$Proved Developed


72.1



120.6



8,673.7



6,542.6Proved Undeveloped


62.3



51.6



6,901.7



4,394.7Total Proved


134.4



172.2



15,575.4



10,937.3     1)
    
    As of the effective date of this report, the Trust previously
    announced it will terminate effective December 31, 2007
    since net revenues to the Trust fell below $5,000,000 for two
    successive years the Termination Threshold during
    2006 and 2007, even though some of the Trust properties have
    remaining productive lives.2)
    
    Total proved reserves and revenues may not equal the sum of the
    separate categories due to the manner in which the Trust model
    handles the recovery of excess production costs. Timing of the
    recoupment of these costs out of total proved production may
    vary slightly from the timing associated with the separate
    proved reserves categories. Future excess production costs will
    be recouped out of total proved production regardless of reserve
    category.




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##### Table of Contents



The Bank of
    New York Mellon Trust Company, N. A.
    July 31, 2009 Trustee,
    LL&E Royalty Trust
    Page 2  Regulation S-X, Rule 4-10(a)
        Estimated Future Net Revenues to the Trust(1)(2)For Production

From Proved


From Proved


From TotalDuring the 12

Developed


Undeveloped


ProvedMonths Ended

Reserves,


Reserves,


Reserves,September 30

M$


M$


M$2009


1,399.9



0.0



1,399.92010


934.8



0.0



934.82011


1,877.0



1,267.4



3,144.42012


1,846.9



1,326.0



3,172.92013


1,262.8



1,187.8



2,450.62014


830.9



1,065.8



1,896.7Remainder


521.4



2,054.7



2,576.1Total


8,673.7



6,901.7



15,575.4     1)
    
    As of the effective date of this report, the Trust previously
    announced it will terminate effective December 31, 2007
    since net revenues to the Trust fell below $5,000,000 for two
    successive years the Termination Threshold during
    2006 and 2007, even though some of the Trust properties have
    remaining productive lives.2)
    
    Total proved reserves and revenues may not equal the sum of the
    separate categories due to the manner in which the Trust model
    handles the recovery of excess production costs. Timing of the
    recoupment of these costs out of total proved production may
    vary slightly from the timing associated with the separate
    proved reserves categories. Future excess production costs will
    be recouped out of total proved production regardless of
    reserves category.  12-month




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##### Table of Contents



The Bank of
    New York Mellon Trust Company, N. A.
    July 31, 2009 Trustee,
    LL&E Royalty Trust
    Page 3    Last Year ofEstimated Future


EstimatedNet Revenues to


EconomicThe Trust,


Life ofProperty

M$(1)(2)


Reserves(3)Jay Field


12,420.4



2017South Pass 89


2,233.4



2012Offshore Louisiana


0.0



2015Fee Lands


921.6



2019Total


15,575.4     1)
    
    As of the effective date of this report, the Trust previously
    announced it will terminate effective December 31, 2007
    since net revenues to the Trust fell below $5,000,000 for two
    successive years the Termination Threshold during
    2006 and 2007, even though some of the Trust properties have
    remaining productive lives.2)
    
    Total proved reserves and revenues may not equal the sum of the
    separate categories due to the manner in which the trust model
    handles the recovery of excess production costs. Timing of the
    recoupment of these costs out of total proved production may
    vary slightly from the timing associated with the separate
    proved reserves categories. Future excess production costs will
    be recouped out of total proved production regardless of
    reserves category.3)
    
    Projected economic life without consideration of estimated
    future dismantlement costs.    Percentage of Net ProceedsWorking Interest Property

Attributable to Overriding RoyaltiesJay Field


50South Pass 89


50Offshore Louisiana


90   property-by-property




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##### Table of Contents



The Bank of
    New York Mellon Trust Company, N. A.
    July 31, 2009 Trustee,
    LL&E Royalty Trust
    Page 4                  Imputed proved reserves to the Trust (expressed in Bbls. or Mcf)

=

Estimated future net revenues to the TrustEstimated
    future gross revenues to the Working Interest Owner(1)

x

Estimated net proved reserves of the Working Interest Owner
    (Bbls. or Mcf)     1)
    
    Prior to subtraction of all costs (including Jay Field fuel and
    severance taxes) and the costs attributable to the Trust.




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##### Table of Contents



The Bank of
    New York Mellon Trust Company, N. A.
    July 31, 2009 Trustee,
    LL&E Royalty Trust
    Page 5             Miller and Lents, Ltd.
      MILLER AND LENTS, LTD.
  By
    /s/  Gary
    W. Priddy   Consulting Engineer,
    P.E.




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##### Table of Contents



The Bank of
    New York Mellon Trust Company, N. A.
    July 31, 2009 Trustee,
    LL&E Royalty Trust
    Page 6   By
    /s/  Robert
    J. Oberst   Senior Vice President,
    P.E.




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##### Table of Contents



INDEX TO
    EXHIBITS
  4*




Trust Agreement for LL&E Royalty Trust, dated as of
    June 1, 1983, between the Company and First City National
    Bank of Houston, as Trustee.28
.1*



Agreement of General Partnership of LL&E Royalty
    Partnership.28
.2*



Form of Conveyance of Overriding Royalty Interests for
    Fort Worth Basin Property.28
.3*



Form of Conveyance of Overriding Royalty Interests for Jay Field
    (Alabama) Property.28
.4*



Form of Conveyance of Overriding Royalty Interests for Jay Field
    (Florida) Property.28
.5*



Form of Conveyance of Overriding Royalty Interests for Offshore
    Louisiana Property.28
.6*



Form of Conveyance of Overriding Royalty Interests for South
    Pass 89 Property.28
.7*



Form of Royalty Deed.31




Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2003.32




Certification pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2003.     *
    
    Incorporated by reference to Exhibits of like designation to
    Registrants Annual Report on
    Form 10-K
    for the period ended December 31, 1983 (Commission File
    No. 1-8518).