<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-K/A
                                (AMENDMENT NO. 1)

(Mark One)
(X)      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended:  December 31, 1997

                                       OR

(   )    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________

                         Commission File Number: 0-2517

                          TOREADOR ROYALTY CORPORATION
             (Exact name of registrant as specified in its charter)

              DELAWARE                                   75-0991164          
   (State or other jurisdiction of                    (I.R.S. Employer       
   incorporation or organization)                    Identification No.)     

      530 PRESTON COMMONS WEST
          8117 PRESTON ROAD
            DALLAS, TEXAS                                  75225
(Address of principal executive offices)                 (Zip Code)

      Registrant's telephone number, including area code: (214) 369-0080

        Securities registered pursuant to Section 12(b) of the Act: NONE

           Securities registered pursuant to Section 12(g) of the Act:

                    COMMON STOCK, PAR VALUE $.15625 PER SHARE

                         PREFERRED STOCK PURCHASE RIGHTS
                              (Title of Each Class)

     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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X].

     THE AGGREGATE MARKET VALUE OF THE VOTING STOCK OF THE REGISTRANT HELD BY
NON-AFFILIATES, COMPUTED BY REFERENCE TO THE CLOSING SALES PRICE OF SUCH STOCK,
AS OF APRIL 24, 1998 WAS $13,160,676. (For purposes of determination of the
foregoing amount, only directors, executive officers and 10% or greater
stockholders have been deemed affiliates.)

     THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK, PAR
VALUE $.15625, AS OF APRIL 24, 1998 WAS 5,140,827 SHARES.


<PAGE>   2
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS

     The Board of Directors currently consists of six persons. Set forth below
are the names, ages and positions of the Company's directors and executive
officers.

<TABLE>
<CAPTION>
                                           PRINCIPAL OCCUPATION                                            DIRECTOR
NAME                               AGE     DURING PAST FIVE YEARS                                          SINCE
-------------------------------  --------  -----------------------------------------------------  ---------------------
<S>                                 <C>    <C>                                                             <C> 
John V. Ballard                     73     Private investor since 1984; prior to 1984,                     1987
                                           President, Tribune Oil Corporation, a public oil
                                           production and exploration company

J. W. Bullion                       84     Of Counsel, Thompson & Knight, P.C., Dallas,                    1986
                                           Texas since 1983; prior to 1983, a partner in the
                                           firm; Secretary of the Company

Thomas P. Kellogg, Jr.              62     Director of Triton Energy Limited, an                           1992
                                           international exploration and production company;
                                           Director of Reef Chemical Company, an oil field
                                           chemical company; consultant and private investor
                                           since 1992; 1990 and 1991, consultant for Ensign
                                           Oil & Gas, Inc.; 1960 to 1990, Vice President of
                                           J. P. Morgan & Co., a commercial and
                                           investment bank

John Mark McLaughlin                67     Chairman of the Board and President of the                      1976
                                           Company; an attorney in private practice in San
                                           Angelo, Texas

Peter R. Vig                        57     Managing Director of Tiger Management,                          1988
                                           L.L.C.; prior to April 1997, Chairman of the
                                           Board, Chief Executive Officer, President and
                                           Treasurer of the Company; initially Vice
                                           President-Acquisition, then Sr. Vice President and
                                           Chief Financial Officer, Sabine Corp., Dallas,
                                           Texas from 1983 to 1988; prior to 1983, President
                                           and Chief Operating Officer, Cambridge Royalty
                                           Co., Houston, Texas

Jack L. Woods                       68     Consulting geologist since 1987; prior to 1987,                 1991
                                           Vice President of Exploration - Gulf Coast,
                                           Celeron Oil and Gas Corporation
</TABLE>

     There is no family relationship between any of the nominees or between any
nominee and any executive officer of the Company.

     The executive officers of the Company consist of Mr. John Mark McLaughlin,
Chairman of the Board and President; Mr. Edward C. Marhanka, Vice President and
Treasurer; and Mr. J. W. Bullion, Secretary. Mr. Marhanka, 41, was appointed as
Vice President and Treasurer in May 1997, having been a petroleum consultant to
the Company since June 1989. Prior to his consulting practice in November 1987,
he was employed as Senior Petroleum Engineer for Penn Resources, Inc., Dallas,
Texas, where he managed their oil and gas properties. Mr. Bullion has served as
Secretary since 1987.


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<PAGE>   3

ITEM 11.  EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS

     The following table sets forth summary information regarding the
compensation awarded to, covered by or paid to John Mark McLaughlin, the
Chairman of the Board and President of the Company, and Peter R. Vig, the former
Chairman of the Board, Chief Executive Officer, President and Treasurer of the
Company who resigned from such capacities in April 1997. None of the other
executive officers of the Company serving as such at the end of or during fiscal
1997 earned total annual salary and bonus that exceeded $100,000. Mr. Vig is the
only executive officer of the Company whose total compensation earned during
fiscal 1995 and 1996 exceeded $100,000.


<TABLE>
<CAPTION>
                                                                      Long Term Compensation
                                                               --------------------------------
                                      Annual Compensation              Awards           Payouts
                            ---------------------------------  --------------------------------
                                                      Other
                                                      Annual   Restricted  Securities              All Other
Name and                                              Compen-     Stock    Underlying     LTIP      Compen-
Principal                                             sation    Award(s)    Options/    Payouts     sation
Position            Year    Salary ($)   Bonus ($)      ($)        ($)      SARs (#)      ($)         ($)
---------           ----    ----------   ---------    -------  ----------  ----------   -------    ---------
<S>                 <C>     <C>              <C>         <C>        <C>      <C>           <C>       <C>  
John Mark           1997        -            -           -          -        30,000        -         8,500
McLaughlin,
Chairman of
the Board and
President (1)

Peter R. Vig,       1997      66,667         -           -          -          -           -        482,620(2)
Chairman of         1996     200,000         -           -          -          -           -         30,709(3)
the Board,          1995     200,000         -           -          -          -           -          3,500(4)
Chief
Executive
Officer and
President
</TABLE>


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


(1)      Mr. McLaughlin was elected Chairman of the Board and President of the
         Company in April 1997, serving with no salary but with an option to
         purchase 30,000 shares of Common Stock at an exercise price of $2.50.
         During 1997 Mr. McLaughlin was paid $8,500 in compensation for services
         provided as a director of the Company.

(2)      In 1997 this amount consisted of (a) $7,500 in compensation for
         services provided as a director, (b) a $388,803 distribution of Mr.
         Vig's accrued benefits under the Company's noncontributory defined
         benefit pension plan and (c) a $86,317 distribution under Mr. Vig's
         supplemental executive retirement plan.

(3)      In 1996 this amount consisted of (a) $26,709 of life insurance 
         premiums and (b) $4,000 in compensation for services provided as a
         director.

(4)      In 1995 this amount consisted of $3,500 in compensation for services 
         provided as a director.



                                     -2-
<PAGE>   4




     The following table provides information on grants of stock options in 1997
to Mr. McLaughlin pursuant to the Company's 1990 Stock Option Plan. 


                              OPTION GRANTS IN 1997

<TABLE>
<CAPTION>
                                         INDIVIDUAL GRANTS
---------------------------------------------------------------------------------------
                            NUMBER OF        % OF TOTAL
                           SECURITIES          OPTIONS
                           UNDERLYING        GRANTED TO      EXERCISE
                             OPTIONS          EMPLOYEES        PRICE       EXPIRATION
                           GRANTED (#)         IN 1997        ($/SH)          DATE
                        ---------------    ---------------  -----------   -------------
<S>                        <C>                 <C>             <C>          <C>       
John Mark McLaughlin       30,000 (1)          48.39%          $2.50        05/15/07
</TABLE>


(1)      These options are immediately exercisable.

     The following table summarizes the number and value of options exercised
during 1997, if any, as well as the number and value of unexercised options, as
of December 31, 1996, held by Messrs. McLaughlin and Vig.


     AGGREGATED OPTION EXERCISES IN 1997 AND DECEMBER 31, 1997 OPTION VALUE

<TABLE>
<CAPTION>
                                                                                                    Value of
                                                                           Number of              Unexercised
                                                                          Unexercised             In-the-Money
                                                                          Options at               Options at
                                                                          FY-End (#)             FY-End ($) (1)
                             Shares Acquired                             Exercisable/             Exercisable/
Name                         on Exercise (#)       Value Realized ($)    Unexercisable           Unexercisable
----------------------      -----------------     --------------------  ---------------         --------------
<S>                                      <C>                     <C>     <C>                        <C>      
John Mark                                  -                       -     50,000 shares/             78,750/ -
McLaughlin                                                                  0 shares
Peter R. Vig                               -                       -     200,000 shares/            300,000/ -
                                                                             0 shares
</TABLE>


(1)  The high sales price per share on December 31, 1997 was $4.50 as reported
     by the Nasdaq National Market.




                                     -3-

<PAGE>   5
PENSION BENEFITS

     The following table shows the annual pension benefits which would be
payable under the Company's noncontributory defined benefit pension plan for
retirement at age 65 for various levels of final average annual pay and years of
service.


<TABLE>
<CAPTION>
                                         ANNUAL BENEFITS FOR YEARS OF SERVICE (1)
                                ----------------------------------------------------------   
FINAL AVERAGE PAY (2)               5          10           15           20          25
---------------------           --------    --------     --------     --------    --------
<S>                             <C>         <C>          <C>          <C>         <C>     
$100,000....................    $ 23,550    $ 47,100     $ 70,650     $ 80,070    $ 80,070
 150,000....................      32,250      70,650      105,975      120,105     120,105
 200,000....................      47,100      94,200      141,300      160,140     160,140
</TABLE>



(1)  Benefits are based on the average of the last five consecutive years of
     service of the participant. After two years of service, a participant has a
     20% vested interest in accrued benefits, and an additional 20% vests each
     subsequent year. Accrued benefits are the product of a participant's
     benefit at age 65 multiplied by the number of years of completed service
     divided by the total number of years of service at age 65. Benefits are
     computed on the basis of straight life annuity amounts and are not subject
     to deduction for Social Security or other offset amounts.

(2)  The pension benefits accruing to the participant are based on total
     compensation, even if it exceeds the limitation imposed by the Internal
     Revenue Code of 1986, as amended (the "Code"). Under Section 401 of the
     Code, the highest annual salary on which benefits can be calculated is
     $150,000 for 1996 and $160,000 for 1997.

     Upon his resignation in April 1997, Mr. Vig had 8 credited years of service
under the retirement plan, and accordingly was distributed $388,803 in accrued
benefits under the plan. In 1996, the Company established a supplemental
executive retirement plan which provides for incremental pension payments by the
Company so that retirement benefit payments are equal to amounts that would have
been payable from the Company's principal retirement plan if it were not for
limitations on these payments imposed by income tax regulations. Pursuant to his
supplemental executive retirement plan, the Company distributed to Mr. Vig
$86,317 upon his resignation. Mr. McLaughlin, the Company's Chairman and
President, is not covered under the Company's principal retirement plan and
supplemental executive retirement plan.

EMPLOYMENT AGREEMENT AND OTHER CHANGE OF CONTROL ARRANGEMENTS

     In 1988, the Company entered into an employment agreement with Mr. Vig
pursuant to which he was employed to serve as the Chairman of the Board and the
Chief Executive Officer of the Company. The agreement, which had been amended
since 1988, expired upon Mr. Vig's resignation on April 21, 1997. The agreement
provided Mr. Vig with an annual salary of $200,000 a year and a lump sum
severance payment equal to the total salary which is payable over the remaining
term of the agreement or $200,000, whichever is larger, if Mr. Vig is discharged
by the Company without cause. If Mr. Vig resigned for cause, the agreement
further provided for a lump sum severance payment of $400,000. Resignation
following a change in control of the Company constitutes a resignation for
cause. 


                                      -4-

<PAGE>   6




Mr. Vig's resignation in April 1997 was not for cause and, therefore, he did not
receive severance payments under the terms of the employment agreement.

     The Company's 1990 Stock Option Plan contains certain "changes in control"
provisions which are applicable to options issued under this plan, including the
options held by John Mark McLaughlin. Such provisions include the following: In
the event of: (i) a dissolution or liquidation of the Company, (ii) a sale of
all or substantially all of the Company's assets, (iii) a merger or
consolidation in which the Company is not the surviving corporation or (iv) a
transaction in which another corporation becomes the owner of 50% or more of the
outstanding Common Stock, then every outstanding option granted under the plan
shall terminate; provided, however, the holders of each such outstanding option
shall have the right immediately prior to such dissolution, liquidation, sale of
assets, merger, consolidation or transaction to exercise any unexercised options
that have not at that time expired or have been terminated without regard to any
vesting periods under the holder's option agreement. Further, the Stock Option
Committee may, in its sole and absolute discretion, accelerate the time of
exercisability of any option that has been granted.

     The Company's Bylaws, as amended, provide for mandatory indemnification of
and advancement of expenses to directors and officers, including former
directors and officers, of the Company in circumstances involving a "change in
control." The Company has entered into separate agreements with its directors
embodying and expanding upon these indemnification provisions in accordance with
the Delaware General Corporation Law.


COMPENSATION OF DIRECTORS

     Directors of the Company are each paid an annual retainer of $6,000, plus
$500 for each regularly scheduled Board of Directors meeting they attend and are
reimbursed for reasonable travel expenses.

     On May 24, 1991, the Board of Directors authorized the Company to enter
into a stock option agreement with each non-employee director of the Company,
subject to stockholder approval within one year of the date of grant of the
option. The agreements were approved by the Company's stockholders at the Annual
Meeting of Stockholders held on May 22, 1992. Identical agreements were entered
into with Donald E. August, John V. Ballard, J. W. Bullion, John Mark McLaughlin
and Jack L. Woods. At the time, Mr. Kellogg was not a director. Each agreement
granted an option to purchase 10,000 shares of Common Stock at a price of $3.625
per share, exercisable during the period commencing May 22, 1992 and ending May
24, 2001, subject to certain conditions. On February 17, 1994, the Company
granted Mr. Kellogg an option to purchase 10,000 shares of Common Stock at a
price of $3.625 per share, exercisable until February 17, 2004, subject to
certain conditions.

     On September 8, 1994, the Board adopted the 1994 Non-Employee Director
Stock Option Plan (the "1994 Plan"), pursuant to which each non-employee
director was and each newly elected non-employee director is granted an option
to purchase 10,000 shares of Common Stock subject to shareholder approval. The
1994 Plan was approved by the Company's stockholders at the Annual Meeting of
Stockholders held on May 18, 1995. As a result, the Company's non-employee
directors at the time - including Messrs. August, Ballard, Bullion, Kellogg,
McLaughlin and Woods - each received options to purchase 10,000 shares of Common
Stock at $3.50 per share. The options under the 1994 Plan are granted at fair
market value on the grant date and become exercisable, subject to certain
conditions, in three equal annual installments on the first three anniversaries
of the grant date and terminate ten years from the grant date unless terminated
sooner as a result of the death or termination of directorship of the holder
thereof.

     The 1994 Plan provides for accelerated vesting of options granted in
certain instances constituting a "change in control." Upon the occurrence of a
"change in control" of the Company, the maturity of the option shall be
accelerated automatically so that the option shall become exercisable in full
with respect to all shares as to which the option shall not have previously been
exercised or become exercisable; provided that no such acceleration shall occur
with respect to the option if a director ceases to be a member of the Board of
Directors prior to the occurrence of such "change in control." A "change in
control" includes mergers, consolidations, reorganizations, sales of assets or a



                                       -5-

<PAGE>   7




dissolution of the Company; a change in the majority of the Board of Directors;
or the acquisition by a stockholder of 20% or more of the Common Stock of the
Company.

     The Company entered into a consulting agreement dated May 1, 1997 with Jack
L. Woods, a director of the Company. The Company agreed to pay Mr. Woods a
consulting fee of $4,500 during the term of this Agreement. As additional
compensation for Mr. Wood's services, the Company granted him an option to
purchase 30,000 shares of Common Stock, which option was immediately exercisable
upon the date of grant.



                                      -6-
<PAGE>   8




ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth as of April 24, 1998 the beneficial
ownership of Common Stock of the Company (the only equity securities of the
Company presently outstanding) by (i) each director and nominee for director of
the Company, (ii) each person who was known to the Company to be the beneficial
owner of more than five percent of the outstanding shares of Common Stock and
(iii) directors and executive officers of the Company as a group. John Mark
McLaughlin, Chairman of the Board, President and a Director of the Company, and
Peter R. Vig, the former Chairman of the Board and Chief Executive Officer who
resigned from these positions in April 1997 and a Director of the Company, are
the only "named executive officers" listed in the Summary Compensation Table
appearing in this Proxy Statement.


<TABLE>
<CAPTION>
                                                                      Common Stock
                                                                   Beneficially Owned
                                                      ------------------------------------------
                                                             Number                Percent of
                                                           of Shares                 Class
                                                      --------------------     -----------------
Name
----
Directors

<S>                                                             <C>                    <C>    
John V. Ballard.....................................            85,000 (1)             1.65(1)

J. W. Bullion.......................................            34,924 (1)             *

Thomas P. Kellogg, Jr...............................            21,000 (1)             *

John Mark McLaughlin................................           290,536 (2)             5.60(2)

Peter R. Vig........................................           247,500 (3)             4.81(3)

Jack L. Woods.......................................            57,000 (2)             1.10(2)

Beneficial owner of 5% or more (excluding
persons named above)

Peter L. Falb, Edward Nathan Dane,                             840,900 (4)            16.36(4)
  Firethorn I Limited Partnership and
  Dane, Falb, Stone & Co., Inc.
c/o Peter L. Falb
33 Broad Street
Boston, Massachusetts  02109

Lee Global Energy Fund, L.P.                                   532,500                10.36%
6688 North Central Expressway
Suite 1150
Dallas, Texas  75206

All directors and officers as a group of 7                     746,960 (5)            14.06(5)
</TABLE>

------------------
*Less than one percent

(1)  Includes 20,000 shares of Common Stock with respect to which such person
     has the right to acquire beneficial ownership upon exercise of currently
     exercisable options (the percentage is calculated on the basis that such
     shares are deemed outstanding).




                                      -7-
<PAGE>   9




(2)  Includes 50,000 shares of Common Stock with respect to which such person
     has the right to acquire beneficial ownership upon exercise of currently
     exercise options (the percentage is calculated on the basis that such
     shares are deemed outstanding).

(3)  Includes 6,600 shares of Common Stock held by Mr. Vig's children, of which
     Mr. Vig disclaims beneficial ownership.

(4)  Based on the most recent amendment to a Schedule 13D dated April 8, 1998
     and filed with the Securities and Exchange Commission ("SEC"), these shares
     are held as follows: Mr. Falb has sole voting and dispositive power with
     respect to 111,000 shares and shared voting and dispositive power with
     respect to 729,900 shares; Mr. Dane has shared voting and dispositive power
     with respect to 729,900 shares; Firethorn I Limited Partnership has sole
     voting and dispositive power with respect to 170,000 shares; and Dane,
     Falb, Stone & Co., Inc. has sole voting and dispositive power with respect
     to 559,100 shares and shared voting and dispositive power with respect to
     800 shares. The group disclosed in the Schedule 13D, as amended, that
     although there is no written or oral agreement between any of the reporting
     persons with respect to the voting and/or disposition of the shares
     reported on this schedule, it is anticipated that all reporting persons,
     acting through Mr. Dane and Mr. Falb, will vote all shares in the same
     manner and may (or may not) make dispositive decisions in the same manner.

(5)  Includes 160,000 shares of Common Stock which are subject to stock options
     currently exercisable by the six directors, 10,000 shares of Common Stock
     which are subject to a stock option currently exercisable by Mr. Edward C.
     Marhanka, Vice President and Treasurer of the Company and 1,000 shares of
     Common Stock which are otherwise owned directly by Mr. Marhanka.

     Except as otherwise indicated, all shares shown in the above table are
owned directly and the holder thereof has sole voting and investment powers with
respect to such shares.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Mr. Bullion, a director and executive officer of the Company, is of counsel
to Thompson & Knight, a Professional Corporation, a Dallas, Texas law firm that
has been retained by the Company as its corporate counsel.



                                      -8-
<PAGE>   10



                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) or 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.



                                TOREADOR ROYALTY CORPORATION

Date:  April 29, 1998


                                By: /s/ JOHN MARK MCLAUGHLIN
                                   --------------------------------------------
                                   John Mark McLaughlin, Chairman and President



                                      -9-