<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q


        [X]     Quarterly Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934
               For the quarterly period ended March 31, 2003
                                              ------------------

                                       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:  1-8424

                              SABINE ROYALTY TRUST
             (Exact name of registrant as specified in its charter)

                 Texas                              75-6297143
      (State or other jurisdiction            (I.R.S. Employer Identi-
          of incorporation or                       fication No.)
             organization)

                                 Trust Division
                             Bank of America, N.A.
                             Bank of America Plaza
                                901 Main Street
                                   17th Floor
                              Dallas, Texas 75202
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (214) 209-2400
              (Registrant's telephone number, including area code)


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
                                        ---    ---

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes X  No
   ---   ---

Number of units of beneficial interest outstanding at May 1, 2003:
14,579,345



<PAGE>

                             SABINE ROYALTY TRUST

                        PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

       The condensed financial statements included herein have been prepared by
Bank of America, N.A. (as successor to NationsBank, N.A.), as Trustee (the
"Trustee") of Sabine Royalty Trust (the "Trust"), pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in annual financial statements have been
condensed or omitted pursuant to such rules and regulations, although the
Trustee believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes
thereto included in the Trust's latest annual report on Form 10-K. The December
31, 2002 balance sheet is derived from the audited balance sheet of that date.
In the opinion of the Trustee, all adjustments necessary to present fairly the
assets, liabilities and trust corpus of the Trust as of March 31, 2003, the
distributable income for the three-month period ended March 31, 2003 and 2002
and the changes in trust corpus for the three-month period ended March 31, 2003
and 2002, have been included. The distributable income for such interim periods
is not necessarily indicative of the distributable income for the full year.

       The condensed financial statements as of March 31, 2003 and for the
three-month periods ended March 31, 2003 and 2002, included herein, have been
reviewed by Deloitte & Touche LLP, independent public accountants, as stated in
their report appearing herein.


                                        2

<PAGE>
                        INDEPENDENT ACCOUNTANTS' REPORT


UNIT HOLDERS OF SABINE ROYALTY TRUST AND BANK OF AMERICA, N.A., TRUSTEE


We have reviewed the accompanying condensed statement of assets, liabilities and
trust corpus of Sabine Royalty Trust as of March 31, 2003, and the related
condensed statements of distributable income for the three-month periods ended
March 31, 2003 and 2002 and changes in trust corpus for the three month periods
ended March 31, 2003 and 2002. 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 procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, 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 described in Note 2 to the condensed financial statements, these condensed
financial statements have been prepared on a modified cash basis of accounting,
which is a comprehensive basis of accounting other than accounting principles
generally accepted in the United States of America.

Based on our review, we are not aware of any material modifications that should
be made to such condensed financial statements for them to be in conformity with
the basis of accounting described in Note 2.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the statement of assets, liabilities
and trust corpus of Sabine Royalty Trust as of December 31, 2002, and the
related statements of distributable income and changes in trust corpus for the
year then ended (not presented herein); and in our report dated March 17, 2003,
we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying condensed statement of
assets, liabilities and trust corpus as of December 31, 2002, is fairly stated,
in all material respects, in relation to the statement of assets, liabilities
and trust corpus from which it has been derived.

/s/ Deloitte & Touche LLP

Dallas, Texas
May 7, 2003


                                        3
<PAGE>
SABINE ROYALTY TRUST

CONDENSED STATEMENTS OF ASSETS,
LIABILITIES AND TRUST CORPUS (UNAUDITED)

<TABLE>
<CAPTION>

                                                MARCH 31,     DECEMBER 31,
ASSETS                                NOTES       2003           2002
------                                -----  -------------   ------------
<S>                                   <C>    <C>             <C>

Cash and short-term investments                $5,274,497    $ 3,898,379
Royalty interests in oil
  and gas properties
  (less accumulated
  amortization of
  $20,950,467 and
  $20,902,284 at
  March 31, 2003 and
  December 31, 2002)                            1,444,718      1,492,901
                                               ----------    -----------

TOTAL                                          $6,719,215    $ 5,391,280
                                               ==========    ===========


LIABILITIES AND TRUST CORPUS
----------------------------

Trust expenses payable                  4      $  178,926     $  408,121
Other payables                          4         569,145        379,940
                                               ----------    -----------
                                                  748,071        788,061
Trust corpus - 14,579,345
  units of beneficial
  interest authorized, issued
  and outstanding                               5,971,144      4,603,219
                                               ----------    -----------

TOTAL                                          $6,719,215    $ 5,391,280
                                               ==========    ===========
</TABLE>


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


                                        4
<PAGE>
SABINE ROYALTY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED MARCH 31,
                                        ---------------------------------

                              NOTES         2003                 2002
                              -----     -----------           -----------
<S>                           <C>       <C>                   <C>

Royalty income                          $ 8,561,994           $ 6,971,454
Interest income                              10,045                10,450
                                        -----------           -----------
Total                                     8,572,039             6,981,904
General and administrative
 expenses                                  (522,473)             (419,853)
                                        -----------           -----------

Distributable income                    $ 8,049,566           $ 6,562,051
                                        ===========           ===========

Distributable income
 per unit (basic and
 assuming dilution)
 (14,579,345 units)           1,3,5     $       .55           $       .45
                                        ===========           ===========
</TABLE>

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


                                       5
<PAGE>
SABINE ROYALTY TRUST

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)

<TABLE>
<CAPTION>
                                   THREE MONTHS ENDED MARCH 31,
                                 --------------------------------
                           NOTE      2003                2002
                           ----  -----------         ------------
<S>                        <C>   <C>                 <C>

Trust corpus, beginning
 of period                      $  4,603,219         $  5,677,097
Amortization of royalty
 interests                           (48,183)             (62,758)
Distributable income               8,049,566            6,562,051
Distributions                3    (6,633,458)          (7,405,146)
                                ------------         ------------

Trust corpus, end
 of period                      $  5,971,144         $  4,771,244
                                ============         ============

Distributions per unit
 (14,579,345 units)          3  $        .45         $        .51
                                ============         ============
</TABLE>

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

                                       6


<PAGE>

SABINE ROYALTY TRUST

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


1.  TRUST ORGANIZATION AND PROVISIONS

     Sabine Royalty Trust (the "Trust") was established by the Sabine
Corporation Royalty Trust Agreement (the "Trust Agreement"), made and entered
into effective as of December 31, 1982, to receive a distribution from Sabine
Corporation ("Sabine") of royalty and mineral interests, including landowner's
royalties, overriding royalty interests, minerals (other than executive rights,
bonuses and delay rentals), production payments and any other similar,
nonparticipatory interest, in certain producing and proved undeveloped oil and
gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma
and Texas (the "Royalties").

     Certificates evidencing units of beneficial interest (the "Units") in the
Trust were mailed on December 31, 1982 to Sabine's shareholders of record on
December 23, 1982, on the basis of one Unit for each share of Sabine's
outstanding common stock. In May 1988, Sabine was acquired by Pacific
Enterprises ("Pacific"), a California corporation. Through a series of mergers,
Sabine was merged into Pacific Enterprises Oil Company (USA) ("Pacific (USA)"),
a California corporation and a wholly owned subsidiary of Pacific, effective
January 1, 1990. This acquisition and the subsequent mergers had no effect on
the Units. Pacific (USA), as successor to Sabine, has assumed by operation of
law all of Sabine's rights and obligations with respect to the Trust. The Units
are listed and traded on the New York Stock Exchange.

     In connection with the transfer of the Royalties to the Trust upon its
formation, Sabine had reserved to itself all executive rights, including rights
to execute leases and to receive bonuses and delay rentals.  In January 1993,
Pacific (USA) completed the sale of substantially all its producing oil and gas
assets to a third party.  The sale did not include executive rights relating to
the Royalties, and Pacific (USA)'s ownership of such rights was not affected by
the sale.

     Bank of America, N.A. (the "Trustee"), acts as trustee of the Trust. The
terms of the Trust Agreement provide, among other things, that:

-  The Trust shall not engage in any business or commercial activity of any kind
   or acquire assets other than those initially transferred to the Trust.

-  The Trustee may not sell all or any part of its assets unless approved by the
   holders of a majority of the outstanding Units in which case the sale must be
   for cash and the proceeds, after satisfying all existing liabilities,
   promptly distributed to Unit holders.

-  The Trustee may establish a cash reserve for the payment of any liability
   that is contingent or uncertain in amount or that otherwise is not currently
   due or payable.

-  The Trustee will use reasonable efforts to cause the Trust and the Unit
   holders to recognize income and expenses on monthly record dates.

-  The Trustee is authorized to borrow funds to pay liabilities of the Trust
   provided that such borrowings are repaid in full before any further
   distributions are made to Unit holders.

-  The Trustee will make monthly cash distributions to Unit holders of record on
   the monthly record date (see Note 3).


                                       7


<PAGE>
      Because of the passive nature of the Trust and the restrictions and
limitations on the powers and activities of the Trustee contained in the Trust
Agreement, the Trustee does not consider any of the officers and employees of
the Trustee to be "officers" or "executive officers" of the Trust as such terms
are defined under applicable rules and regulations adopted under the Securities
Exchange Act of 1934.

      The proceeds of production from the Royalties are receivable from hundreds
of separate payors. In order to facilitate creation of the Trust and to avoid
the administrative expense and inconvenience of daily reporting to Unit holders,
the conveyances by Sabine of the Royalties located in five of the six states
provided for the execution of an escrow agreement by Sabine and the initial
trustee of the Trust, in its capacities as trustee of the Trust and as escrow
agent. The conveyances by Sabine of the Royalties located in Louisiana provided
for the execution of a substantially identical escrow agreement by Sabine and a
Louisiana bank in the capacities of escrow agent and of trustee under the name
of Sabine Louisiana Royalty Trust. Sabine Louisiana Royalty Trust, the sole
beneficiary of which is the Trust, was established in order to avoid uncertainty
under Louisiana law as to the legality of the Trustee's holding record title to
the Royalties located in Louisiana. As of December 31, 2001, Bank of America has
assumed the responsibilities and functions as escrow agent and trustee of the
Sabine Louisiana Royalty Trust.

     Pursuant to the terms of the escrow agreements and the conveyances of
the properties by Sabine, the proceeds of production from the Royalties for each
calendar month, and interest thereon, are collected by the escrow agents and are
paid to and received by the Trust only on the next monthly record date. The
escrow agents have agreed to endeavor to assure that they incur and pay expenses
and fees for each calendar month only on the next monthly record date. The
Trust Agreement also provides that the Trustee is to endeavor to assure that
income of the Trust will be accrued and received and expenses of the Trust will
be incurred and paid only on each monthly record date. Assuming that the escrow
agreement is recognized for Federal income tax purposes and that the Trustee
and escrow agents are able to control the timing of income and expenses, as
stated above, cash and accrual basis Unit holders should be treated as realizing
income only on each monthly record date. The Trustee is treating the escrow
agreement as effective for tax purposes. However, for financial reporting
purposes, royalty and interest income are recorded in the calendar month in
which the amounts are received by either the escrow agents or the Trust.

     Distributable income as determined for financial reporting purposes for a
given quarter will not usually equal the sum of distributions made during that
quarter. Distributable income for a given quarter will approximate the sum of
the distributions made during the last two months of such quarter and the first
month of the next quarter.

                                       8


<PAGE>

2.  ACCOUNTING POLICIES

    Basis of Accounting

     The financial statements of the Trust are prepared on the following basis
and are not intended to present financial position and results of operations in
conformity with accounting principles generally accepted in the United States
of America:

-  Royalty income, net of severance and ad valorem tax, and interest income are
   recognized in the month in which amounts are received by the Trust (see Note
   1).

-  Trust expenses, consisting principally of routine general and administrative
   costs, include payments made during the accounting period. Expenses are
   accrued to the extent of amounts that become payable on the next monthly
   record date following the end of an accounting period. Reserves for
   liabilities that are contingent or uncertain in amount may also be
   established if considered necessary.

-  Royalties that are producing properties are amortized using the unit-of-
   production method. This amortization is shown as a reduction of Trust corpus.

-  Distributions to Unit holders are recognized when declared by the Trustee
   (see Note 3).

     The financial statements of the Trust differ from financial statements
prepared in conformity with accounting principles generally accepted in the
United States of America because of the following:

-  Royalty income is recognized in the month received rather than in the month
   of production.

-  Expenses other than those expected to be paid on the following monthly record
   date are not accrued.

-  Amortization of the Royalties is shown as a reduction to Trust Corpus and not
   as a charge to operating results.

-  Reserves may be established for contingencies that would not be recorded
   under accounting principles generally accepted in the United States of
   America.

     Use of Estimates

     The preparation of financial statements in conformity with the basis of
accounting described above requires management to make estimates and assumptions
that affect reported amounts of certain assets, liabilities, revenues and
expenses as of and for the reporting periods. Actual results may differ from
such estimates.

     Impairment

      Trust management routinely reviews its royalty interests in oil and gas
properties for impairment whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable. If an impairment event
occurs and it is determined that the carrying value of the Trust's royalty
interests may not be recoverable, an impairment will be recognized as measured
by the amount by which the carrying amount of the royalty interests exceeds the
fair value of these assets, which would likely be measured by discounting
projected cash flows.

     New Accounting Standards

     SFAS No. 143, "Accounting for Asset Retirement Obligations" was issued in
June 2001, and was adopted by the Trust on January 1, 2003. This Statement
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. The effect of adopting SFAS No. 143 did not have a material
impact on the Trust's financial statements.

     SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" was issued in April 2002
and is effective for fiscal years beginning after May 15, 2002. This Statement
includes the rescission of FASB Statement No. 4, "Reporting Gains and Losses
from Extinguishment of Debt", and an amendment to FASB Statement No. 4,
"Reporting Gains and Losses from Extinguishment of Debt", and an amendment to
FASB Statement No. 13, "Accounting for Leases", to eliminate an inconsistency
between the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. The effect of adopting SFAS No. 145 did
not have a material impact on the Trust's financial statements.

     SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities" was issued in June 2002 and will be effective for exit or disposal
activities subsequent to December 31, 2002. The Trust's financial statements
were not materially impacted by the adoption of this accounting standard.

     SFAS No. 148, "Accounting for Stock-Based Compensation -- Transition and
Disclosure, an amendment of FASB Statement No. 123," was issued in December 2002
and provides new transition methods if an entity adopts the fair value based
method of valuing stock-based compensation suggested in SFAS No. 123 "Accounting
for Stock-Based Compensation," as well as requiring additional disclosures in
interim and annual financial statements. The Trust has no options or other
stock-based instruments and accordingly, the impact of this new Standard was not
material to the financial statements of the Trust.

     FASB interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others," requires disclosures beginning with financial statements ending after
December 15, 2002 and requires liability recognition beginning January 1, 2003.
The Trust had no such guarantees outstanding as of March 31, 2003.

     FIN No. 46, "Consolidation of Variable Interest Entities" was issued in
January 2003. This interpretation of Accounting Research Bulletin No. 51,
"Consolidated Financial Statements," applies immediately to variable interest
entities created after January 31, 2003 and applies to the first period
beginning after June 15, 2003 to entities acquired before February 1, 2003. This
FIN does not affect the Trust as it has no unconsolidated subsidiaries accounted
for under the equity method of accounting.

     Distributable Income per Unit

     Basic earnings per Unit is computed by dividing net income by the weighted
average Units outstanding. Earnings per Unit assuming dilution is computed by
dividing net income by the weighted average number of Units and equivalent
Units outstanding. The Trust had no equivalent Units outstanding for any period
presented. Basic and assuming dilution distributable income per Unit are the
same.

     Federal Income Taxes

     The Internal Revenue Service has ruled that the Trust would be classified
as a grantor trust for Federal income tax purposes and therefore is not subject
to taxation at the trust level. The Unit holders are considered, for Federal
income tax purposes, to own the Trust's income and principal as though no trust
were in existence. Accordingly, no provision for Federal income tax expense has
been made in these financial statements. The income of the Trust will be deemed
to have been received or accrued by each Unit holder at the time such income is
received or accrued by the Trust.


                                       9

<PAGE>
3.  DISTRIBUTION TO UNIT HOLDERS

     The amount to be distributed to Unit holders ("Monthly Income Amount") is
determined on a monthly basis. The Monthly Income Amount is an amount equal to
the sum of cash received by the Trust during a monthly period (the period
commencing on the day after a monthly record date and continuing through and
including the next succeeding monthly record date) attributable to the
Royalties, any reduction in cash reserves and any other cash receipts of the
Trust, including interest, reduced by the sum of liabilities paid and any
increase in cash reserves. Unit holders of record as of the monthly record date
(the 15th day of each calendar month except in limited circumstances) are
entitled to have distributed to them the calculated Monthly Income Amount for
such month on or before 10 business days after the monthly record date. The
Monthly Income Amount per Unit is declared by the Trust no later than 10 days
prior to the monthly record date.

     The cash received by the Trust from purchasers of the Trust's oil and gas
production consists of gross sales of production less applicable severance
taxes.

4.  PAYABLES

     Other payables consist primarily of royalty receipts suspended pending
verification of ownership interest or title.

     The Trustee believes that these other payables represent an ordinary
operating condition of the Trust and that such payables will be paid or released
in the normal course of business.


5.  SUBSEQUENT EVENTS

     Subsequent to March 31, 2003, the Trust declared the following
distributions:

<TABLE>
<CAPTION>
                  Monthly
                  Record            Payment        Distribution
                  Date              Date            per Unit
                  -----------       -------        ------------
                  <S>               <C>            <C>
                  April 15          April 29         $.24613
                  May 15            May 29           $.26979
</TABLE>


                                       10
<PAGE>
Item 2.  Trustee's Discussion and Analysis of Financial Condition and Results of
         Operations.

Liquidity and Capital Resources

     Sabine Royalty Trust (the "Trust") makes monthly distributions to the
holders of units of beneficial interest in the Trust ("Units") of the excess of
the preceding month's revenues received over expenses incurred. Upon receipt,
royalty income is invested in short-term investments until its subsequent
distribution. In accordance with the Trust Agreement, the Trust's only long-term
assets consist of royalty interests in producing and proved undeveloped oil and
gas properties. Although the Trust is permitted to borrow funds if necessary to
continue its operations, borrowings are not anticipated in the foreseeable
future.

Results of Operations

     Distributable income consists of royalty income plus interest income plus
any decrease in cash reserves established by the Trustee less general and
administrative expenses of the Trust less any increase in cash reserves
established by the Trustee. Distributable income for the three months ended
March 31, 2003 was $8,049,566 or $.55 per Unit. Royalty income amounted to
$8,561,994 while interest income was $10,045. General and administrative
expenses totaled $522,473.

     Distributions during the period were $.17308, $.16437, and $.11754 per
Unit to Unit holders of record on January 15, February 18 and March 17,
respectively.

     Royalty income for the quarter ended March 31, 2003 increased approximately
$1,590,000, or 23%, compared with the first quarter of 2002 due to increases in
oil and gas prices as well as a slight increase in oil production. This increase
was offset somewhat by a decrease in gas production. Compared to the preceding
quarter ended December 31, 2002, royalty income increased approximately
$1,310,000, or 18%, due to an increase in the price of gas and an increase in
oil production. This increase was tempered by a decrease in the production of
gas and a slight decrease in the price of oil.

     The following tables illustrate average prices received for the periods
discussed above and the related oil and gas production volumes:

<TABLE>
<CAPTION>
                                                Quarter Ended
                          ----------------------------------------------------------
                             March 31,             March 31,           December 31,
                               2003                  2002                  2002
<S>                       <C>                   <C>                   <C>
Production
  Oil (Bbls)                  139,354                138,290               131,141
  Gas (Mcfs)                1,321,251              1,732,036             1,539,546

Average Price
  Oil (per Bbl)            $    23.29             $    17.74            $    23.95
  Gas (per Mcf)            $     4.05             $     2.39            $     2.98
</TABLE>


     Gas revenues received for the three months ended March 31, 2003, related
primarily to production for October through December. The average price of gas
as reported by the Henry Hub for the same time period was $3.87 per Mcf. The
average price of gas for the Henry Hub was $5.67 per Mcf for January 2003
through March 2003. Oil revenues for the three months ended March 31, 2003
related primarily to production for November through January. The average price
of oil as reported by Nymex for that time period was $29.11 per barrel. The
average price of oil was $33.85 per barrel for January 2003 through March 2003.
As of May 5, 2003, the average price of gas for the Henry Hub was $4.71 per Mcf
and the average price of oil reported by Nymex was $25.67 per barrel. It is
difficult to accurately estimate future prices of oil and gas, and any
assumptions concerning future prices may prove to be incorrect.

     Interest income for the quarter ended March 31, 2003 decreased
approximately $400 compared with the first quarter of 2002. Compared to the
preceding quarter ended December 31, 2002, interest income increased
approximately $1,200. Changes in interest income are the result of changes in
interest rates and funds available for investment.

     General and administrative expenses for the quarter ended March 31, 2003
increased by $102,600 compared to the same quarter of 2002 primarily due to the
timing of payment of expenses for professional services. Compared to the
preceding quarter ended December 31, 2002, general and administrative expenses
increased approximately $172,200. This increase was primarily due to the net
effect of normal fluctuations in trust expenses.

Critical Accounting Policies and Estimates

     The Trust's financial statements reflect the selection and application of
accounting policies that require the Trust to make significant estimates and
assumptions. The following are some of the more critical judgement areas in the
application of accounting policies that currently affect the Trust's financial
condition and results of operations.

     Basis of Accounting

     The financial statements of the Trust are prepared on the following basis
and are not intended to present financial position and results of operations in
conformity with accounting principles generally accepted in the United States
of America:

     o    Royalty income, net of severance and ad valorem taxes, and interest
          income are recognized in the month in which amounts are received by
          the Trust.

     o    Trust expenses, consisting principally of routine general and
          administrative costs, include payments made during the accounting
          period. Expenses are accrued to the extent of amounts that become
          payable on the next monthly record date following the end of the
          accounting period. Reserves for liabilities that are contingent or
          uncertain in amount may also be established if considered necessary.

     o    Royalties that are producing properties are amortized using the
          unit-of-production method. This amortization is shown as a reduction
          of Trust corpus.

     o    Distributions to Unit holders are recognized when declared by the
          Trustee.

     The financial statements of the Trust differ from financial statements
prepared in conformity with accounting principles generally accepted in the
United States of America because of the following:

     o    Royalty income is recognized in the month received rather than in the
          month of production.

     o    Expenses other than those expected to be paid on the following
          monthly record date are not accrued.

     o    Amortization of the Royalties is shown as a reduction to Trust corpus
          and not as a charge to operating results.

     o    Reserves may be established for contingencies that would be recorded
          under accounting principles generally accepted in the United States of
          America.

     Revenue Recognition

     Revenues from Royalty Interests are recognized in the period in which
amounts are received by the Trust. Royalty income received by the Trust in a
given calendar year will generally reflect the proceeds, on an entitlements
basis, from natural gas produced for the twelve-month period ended September
30th in that calendar year.

     Reserve Disclosure

     Independent petroleum engineers estimate the net proved reserves
attributable to the Royalty Interest. In accordance with Statement of Financial
Standards No. 69, "Disclosures About Oil and Gas Producing Activities",
estimates of future net revenues from proved reserves have been prepared using
year-end contractual gas prices and related costs. Numerous uncertainties are
inherent in estimating volumes and the value of proved reserves and in
projecting future production rates and the timing of development of
non-producing reserves. Such reserve estimates are subject to change as
additional information becomes available. The reserves actually recovered and
the timing of production may be substantially different from the reserve
estimates.

     Contingencies

     Contingencies related to the Royalty Properties that are unfavorably
resolved would generally be reflected by the Trust as reductions to future
royalty income payments to the Trust with corresponding reductions to cash
distributions to Unit holders. The Trustee is aware of no such items as of
March 31, 2003.

     Use of Estimates

     The preparation of financial statements in conformity with the basis of
accounting described above requires management to make estimates and assumptions
that affect reported amounts of certain assets, liabilities, revenues and
expenses as of and for the reporting periods. Actual results may differ from
such estimates.

     Impairment

      Trust management routinely reviews its royalty interests in oil and gas
properties for impairment whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable. If an impairment event
occurs and it is determined that the carrying value of the Trust's royalty
interests may not be recoverable, an impairment will be recognized as measured
by the amount by which the carrying amount of the royalty interests exceeds the
fair value of these assets, which would likely be measured by discounting
projected cash flows.

     New Accounting Standards

     SFAS No. 143, "Accounting for Asset Retirement Obligations" was issued in
June 2001, and was adopted by the Trust on January 1, 2003. This Statement
addresses financial accounting and reporting for obligations associated with
the retirement of tangible long-lived assets and the associated asset
retirement costs. The effect of adopting SFAS No. 143 did not have a material
impact on the Trust's financial statements.

     SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" was issued in April 2002
and is effective for fiscal years beginning after May 15, 2002. This Statement
includes the rescission of FASB Statement No. 4, "Reporting Gains and Losses
from Extinguishment of Debt", and an amendment to FASB Statement No. 4,
"Reporting Gains and Losses from Extinguishment of Debt", and an amendment to
FASB Statement No. 13, "Accounting for Leases", to eliminate an inconsistency
between the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. The effect of adopting SFAS No. 145 did
not have a material impact on the Trust's financial statements.

     SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities" was issued in June 2002 and will be effective for exit or disposal
activities subsequent to December 31, 2002. The Trust's financial statements
were not materially impacted by the adoption of this accounting standard.

     SFAS No. 148, "Accounting for Stock-Based Compensation -- Transition and
Disclosure, an amendment of FASB Statement No. 123," was issued in December 2002
and provides new transition methods if an entity adopts the fair value based
method of valuing stock-based compensation suggested in SFAS No. 123 "Accounting
for Stock-Based Compensation," as well as requiring additional disclosures in
interim and annual financial statements. The Trust has no options or other
stock-based instruments and accordingly, the impact of this new Standard was not
material to the financial statements of the Trust.

     FASB interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others," requires disclosures beginning with financial statements ending after
December 15, 2002 and requires liability recognition beginning January 1, 2003.
The Trust had no such guarantees outstanding as of March 31, 2003.

     FIN No. 46, "Consolidation of Variable Interest Entities" was issued in
January 2003. This interpretation of Accounting Research Bulletin No. 51,
"Consolidated Financial Statements," applies immediately to variable interest
entities created after January 31, 2003 and applies to the first period
beginning after June 15, 2003 to entities acquired before February 1, 2003. This
FIN does not affect the Trust as it has no unconsolidated subsidiaries accounted
for under the equity method of accounting.

Forward Looking Statements

     This Report includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, which are intended to be
covered by the safe harbor created thereby. All statements other than statements
of historical fact included in this Report are forward-looking statements.
Although the Trustee believes that the expectations reflected in such forward-
looking statements are reasonable, such expectations are subject to numerous
risks and uncertainties and the Trustee can give no assurance that they will
prove correct. There are many factors, none of which is within the Trustee's
control, that may cause such expectations not to be realized, including, among
other things, factors identified in the Trust's most recent Annual Report on
Form 10-K affecting oil and gas prices and the recoverability of reserves,
general economic conditions, actions and policies of petroleum-producing nations
and other changes in the domestic and international energy markets.


                                       11
<PAGE>

     The Trust created an Internet website in early 2003 and has made available
its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to such reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act at http://www.sbr-sabineroyalty.com
as soon as reasonably practicable after such information is electronically filed
with or furnished to the SEC.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

     The Trust invests in no derivative financial instruments, and has no
foreign operations or long-term debt instruments. The Trust is a passive entity
and other than the Trust's ability to periodically borrow money as necessary to
pay expenses, liabilities and obligations of the Trust that cannot be paid out
of cash held by the Trust, the Trust is prohibited from engaging in borrowing
transactions. The amount of any such borrowings is unlikely to be material to
the Trust. The Trust periodically holds short term investments acquired with
funds held by the Trust pending distribution to Unitholders and funds held in
reserve for the payment of Trust expenses and liabilities. Because of the
short-term nature of these borrowings and investments and certain limitations
upon the types of such investments which may be held by the Trust, the Trustee
believes that the Trust is not subject to any material interest rate risk. The
Trust does not engage in transactions in foreign currencies which could expose
the Trust or Unitholders to any foreign currency related market risk.

Item 4. Controls and Procedures.

     Within the 90 days prior to the date of this report, the Trustee carried
out an evaluation of the effectiveness of the design and operation of the
Trust's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.
Based upon that evaluation, the Trustee concluded that the Trust's disclosure
controls and procedures are effective in timely alerting the Trustee to material
information relating to the Trust required to be included in the Trust's
periodic filings with the Securities and Exchange Commission. No significant
changes in the Trust's internal controls or other factors that could affect
these controls have occurred subsequent to the date of such evaluation.


                          PART II - OTHER INFORMATION

Items 1-6 not applicable.



                                       12



<PAGE>
                                 SIGNATURES

     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.


                                    SABINE ROYALTY TRUST

                                    By: Bank of America, N.A.
                                        Trustee


                                    By:  /s/ Ron E. Hooper
                                        --------------------------------------
                                        Ron E. Hooper
                                        Senior Vice President and
                                        Trust Administrator

Date:  May 14, 2003

    (The Trust has no directors or executive officers.)


                                       13
<PAGE>


                                 CERTIFICATIONS

I, Ron Hooper, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sabine Royalty Trust,
for which Bank of America, N.A. acts as Trustee;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, distributable income and changes in trust
corpus of the registrant as of, and for, the periods presented in this quarterly
report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14), or for causing
such procedures to be established and maintained, for the registrant and I have:

         a)       designed such disclosure controls and procedures, or caused
                  such controls and procedures to be designed, to ensure that
                  material information relating to the registrant, including its
                  consolidated subsidiaries, is made known to me by others
                  within those entities, particularly during the period in which
                  this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report my conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on my evaluation as of the Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors:

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves persons who
                  have a significant role in the registrant's internal controls;
                  and

6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.



Date: May 14, 2003                            By: /s/ Ron Hooper
                                                 -------------------------------
                                                 Ron Hooper
                                                 Senior Vice President and
                                                 Trust Administrator
                                                 Bank of America, N.A.



                                       14
<PAGE>
                                INDEX TO EXHIBITS


<Table>
<Caption>
      Exhibit No.          Description
      -----------          -----------
<S>                        <C>
         99.1              Certificate by Bank of America, Trustee of Sabine
                           Royalty Trust, dated May 14, 2003 and submitted
                           pursuant to Section 906 of the Sarbanes-Oxley Act of
                           2002 (18 U.S.C. Section 1350).
</Table>


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