<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 JUNE 30, 2003

              [ ] 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 1-8033

                           PERMIAN BASIN ROYALTY TRUST
                  (EXACT NAME OF REGISTRANT AS SPECIFIED IN THE
                     PERMIAN BASIN ROYALTY TRUST INDENTURE)

             Texas                                               75-6280532
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)


                              Bank of America, N.A.
                                Trust Department
                                 901 Main Street
                               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 Security Exchange Act of 1934). Yes [ ] No [X]

         Number of Units of beneficial interest of the Trust outstanding at
August 1, 2003: 46,608,796.



<PAGE>

                           PERMIAN BASIN 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 Trustee for the Permian Basin Royalty Trust, without audit,
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 the notes thereto included in the Trust's latest annual report on
Form 10-K. In the opinion of the Trustee, all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the assets,
liabilities and trust corpus of the Permian Basin Royalty Trust at June 30,
2003, and the distributable income and changes in trust corpus for the
three-month and six-month periods ended June 30, 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.

Deloitte & Touche LLP, independent certified public accountants, has made a
limited review of the condensed financial statements as of June 30, 2003 and for
the three-month and six-month periods ended June 30, 2003 and 2002 included
herein.





                                       2
<PAGE>

                         INDEPENDENT ACCOUNTANTS' REPORT


Bank of America, N.A.,
         as Trustee for the Permian Basin Royalty Trust

We have reviewed the accompanying condensed statement of assets, liabilities and
trust corpus of Permian Basin Royalty Trust as of June 30, 2003 and the related
condensed statements of distributable income and changes in trust corpus for the
three-month and six-month periods ended June 30, 2003 and 2002. These financial
statements are the responsibility of the Trustee.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with 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 1 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 reviews, 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 1.

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 Permian Basin 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 25, 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
August 11, 2003



                                       3
<PAGE>
PERMIAN BASIN ROYALTY TRUST

CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS

<Table>
<Caption>
                                                        June 30,    December 31,
                                                         2003           2002
                                                     ------------   ------------
                                                      (Unaudited)
<S>                                                  <C>            <C>
ASSETS

Cash and short-term investments                      $  2,601,810   $  2,371,387

Net overriding royalty interests in
    producing oil and gas properties
    (net of accumulated amortization
    of $8,889,549, and $8,802,823 at
    June 30, 2003 and December 31,
    2002, respectively)                                 2,085,667      2,172,393
                                                     ------------   ------------

TOTAL ASSETS                                         $  4,687,477   $  4,543,780
                                                     ============   ============

LIABILITIES AND TRUST CORPUS

Distribution payable to Unit holders                 $  2,601,810   $  2,371,387

Commitments and contingencies
Trust corpus - 46,608,796 Units of
    beneficial interest authorized and
    outstanding                                         2,085,667      2,172,393
                                                     ------------   ------------

TOTAL LIABILITIES
 AND TRUST CORPUS                                    $  4,687,477   $  4,543,780
                                                     ============   ============
</Table>


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



                                       4
<PAGE>


PERMIAN BASIN ROYALTY TRUST

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)


<Table>
<Caption>
                                    Three Months Ended               Six Months Ended
                                          June 30                         June 30
                                ----------------------------    ----------------------------
                                   2003            2002            2003            2002
                                ------------    ------------    ------------    ------------
<S>                             <C>             <C>             <C>             <C>
Royalty income                  $  8,569,350    $  5,654,312    $ 15,552,724    $ 10,228,540
Interest income                        3,400           3,058           6,935           7,892
                                ------------    ------------    ------------    ------------
                                   8,572,750       5,657,370      15,559,659      10,236,432

General and administrative
    expenditures                    (147,705)       (134,628)       (365,133)       (295,379)
                                ------------    ------------    ------------    ------------

Distributable income            $  8,425,045    $  5,522,742    $ 15,194,526    $  9,941,053
                                ============    ============    ============    ============

Distributable income per Unit
    (46,608,796 Units)          $    .180761    $    .118491    $    .326001    $    .213287
                                ============    ============    ============    ============
</Table>


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



                                       5
<PAGE>
PERMIAN BASIN ROYALTY TRUST

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)

<Table>
<Caption>
                                         Three Months Ended               Six Months Ended
                                              June 30                         June 30
                                    ----------------------------    ----------------------------
                                        2003            2002            2003            2002
                                    ------------    ------------    ------------    ------------
<S>                                 <C>             <C>             <C>             <C>
Trust corpus, beginning of period   $  2,129,927    $  2,329,575    $  2,172,393    $  2,371,187

Amortization of net
    overriding royalty interests         (44,260)        (54,262)        (86,726)        (95,874)
Distributable income                   8,425,045       5,522,742      15,194,526       9,941,053
Distributions declared                (8,425,045)     (5,522,742)    (15,194,526)     (9,941,053)
                                    ------------    ------------    ------------    ------------
Total Trust Corpus, end of period
                                    $  2,085,667    $  2,275,313    $  2,085,667    $  2,275,313
                                    ============    ============    ============    ============

Distributions per unit              $    .180761    $    .118491    $    .326001    $    .213287
                                    ============    ============    ============    ============
</Table>



                                       6
<PAGE>
PERMIAN BASIN ROYALTY TRUST

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


1.   BASIS OF ACCOUNTING

The Permian Basin Royalty Trust ("Trust") was established as of November 1,
1980. The net overriding royalties conveyed to the Trust include: (1) a 75% net
overriding royalty carved out of Southland Royalty Company's fee mineral
interests in the Waddell ranch in Crane County, Texas (the "Waddell Ranch
properties"); and (2) a 95% net overriding royalty carved out of Southland
Royalty Company's major producing royalty interests in Texas (the "Texas Royalty
properties"). The net overriding royalty for the Texas Royalty properties is
subject to the provisions of the lease agreements under which such royalties
were created. The financial statements of the Trust are prepared on the
following basis:

o        Royalty income recorded for a month is the amount computed and paid to
         Bank of America, N.A. ("Trustee") as Trustee for the Trust by the
         interest owners: Burlington Resources Oil & Gas Company ("BROG") for
         the Waddell Ranch properties and River Hill Energy Corporation ("River
         Hill Energy"), formerly a wholly owned subsidiary of River Hill Capital
         Corporation ("River Hill Capital") and formerly an affiliate of Coastal
         Management Corporation ("CMC"), for the Texas Royalty properties. CMC
         currently conducts all field, technical and accounting operations on
         behalf of BROG with regard to the Waddell Ranch properties. CMC also
         conducts the accounting operations for the Texas Royalty properties on
         behalf of River Hill Energy. Royalty income consists of the amounts
         received by the owners of the interest burdened by the net overriding
         royalty interests ("Royalties") from the sale of production less
         accrued production costs, development and drilling costs, applicable
         taxes, operating charges, and other costs and deductions multiplied by
         75% in the case of the Waddell Ranch properties and 95% in the case of
         the Texas Royalty properties.

         As was previously reported, in February 1997, BROG sold its interest in
         the Texas Royalty properties to River Hill Energy.

         The Trustee has been advised that in the first quarter of 1998,
         Schlumberger Technology Corporation ("Schlumberger") acquired all of
         the shares of stock of River Hill Capital. Prior to such acquisition by
         Schlumberger, CMC and River Hill Energy were wholly owned subsidiaries
         of River Hill Capital. The Trustee has further been advised that in
         connection with Schlumberger's acquisition of River Hill Capital, the
         shareholders of River Hill Capital acquired ownership of all of the
         shares of stock of River Hill Energy. Thus, the ownership in the Texas
         Royalty properties referenced above remained in River Hill Energy, the
         stock ownership of which was acquired by the former shareholders of
         River Hill Capital.

o        Trust expenses recorded are based on liabilities paid and cash reserves
         established out of cash received or borrowed funds for liabilities and
         contingencies.


                                       7
<PAGE>

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

o        Royalty income is computed separately for each of the conveyances under
         which the Royalties were conveyed to the Trust. If monthly costs exceed
         revenues for any conveyance ("excess costs"), such excess cannot reduce
         royalty income from other conveyances, but is carried forward with
         accrued interest to be recovered from future net proceeds of that
         conveyance.

The financial statements of the Trust differ from financial statements prepared
in accordance with accounting principles generally accepted in the United States
of America ("GAAP") because revenues are not accrued in the month of production
and certain cash reserves may be established for contingencies which would not
be accrued in financial statements. Amortization of the Royalties calculated on
a unit-of-production basis is charged directly to trust corpus.

SFAS No. 149, "Accounting for Derivative Instruments and Hedging Activities, an
amendment of FASB Statement No. 133" was issued in April 2003 and is effective
for contracts entered into after June 20, 2003. The statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts. The Trust
has no derivative instruments and accordingly, the impact of this new standard
will not be material to the financial statements of the Trust.

SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equities" was issued in May 2003, and is effective for
fiscal quarters beginning after June 15, 2003. The Trust has no Financial
Instruments and accordingly, the impact of this new standard will not be
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 June 30, 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.

2. FEDERAL INCOME TAXES

For Federal income tax purposes, the Trust constitutes a fixed investment trust
which is taxed as a grantor trust. A grantor trust is not subject to tax at the
trust level. The Unit holders are considered to own the Trust's income and
principal as though no trust were in existence. The income of the Trust is
deemed to have been received or accrued by each Unit holder at the time such
income is received or accrued by the Trust and not when distributed by the
Trust.



                                       8
<PAGE>
The Royalties constitute "economic interests" in oil and gas properties for
Federal income tax purposes. Unit holders must report their share of the
revenues from the Royalties as ordinary income from oil and gas royalties and
are entitled to claim depletion with respect to such income.

The Trust has on file technical advice memoranda confirming the tax treatment
described above.

The classification of the Trust's income for purposes of the passive loss rules
may be important to a Unit holder. Royalty income generally is treated as
portfolio income and does not offset passive losses.

3. SUBSEQUENT EVENTS

Subsequent to June 30, 2003, the Trust declared a distribution on July 18, 2003
of $.054215 payable on August 14, 2003.

ITEM 2. TRUSTEE'S DISCUSSION AND ANALYSIS

FORWARD LOOKING INFORMATION

Certain information included in this report contains, and other materials filed
or to be filed by the Trust with the Securities and Exchange Commission (as well
as information included in oral statements or other written statements made or
to be made by the Trust) may contain or include, forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended. Such forward
looking statements may be or may concern, among other things, capital
expenditures, drilling activity, development activities, production efforts and
volumes, hydrocarbon prices and the results thereof, and regulatory matters.
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 such as actual oil and gas prices and the
recoverability of reserves, capital expenditures, general economic conditions,
actions and policies of petroleum-producing nations and other changes in the
domestic and international energy markets. Such forward looking statements
generally are accompanied by words such as "estimate," "expect," "predict,"
"anticipate," "goal," "should," "assume," "believe," or other words that convey
the uncertainty of future events or outcomes.

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002

For the quarter ended June 30, 2003 royalty income received by the Trust
amounted to $8,569,350 compared to royalty income of $5,654,312 during the
second quarter of 2002. The increase in royalty income is primarily attributable
to significant increases in both oil and gas prices and higher production for
both oil and gas.

Interest income for the quarter ended June 30, 2003, was $3,400 compared to
$3,058 during the second quarter of 2002. The increase in interest income is
primarily attributable to more funds available for investment. General and
administrative expenses during the second quarter of 2003 amounted to $147,705
compared to $134,628 during the second quarter of 2002. The increase in general
and administrative expenses can be primarily attributed to the timing of payment
of year end expenses.



                                       9
<PAGE>

These transactions resulted in distributable income for the quarter ended June
30, 2003 of $8,425,045, or $.180761 per Unit of beneficial interest.
Distributions of $.054327, $.070610 and $.055822 per Unit were made to Unit
holders of record as of April 30, May 30 and June 30, 2003, respectively. For
the second quarter of 2002, distributable income was $5,522,742, or $.118491 per
Unit of beneficial interest.

Royalty income for the Trust for the second quarter of the calendar year is
associated with actual oil and gas production for the period of February, March
and April 2003 from the properties from which the Trust's net overriding royalty
interests ("Royalties") were carved. Oil and gas sales attributable to the
Royalties and the properties from which the Royalties were carved are as
follows:

<Table>
<Caption>
                                                        SECOND QUARTER
                                                   -----------------------
                                                     2003          2002
                                                   ---------     ---------
<S>                                                <C>           <C>
ROYALTIES:
Oil sales (Bbls)                                     171,432       190,930
Gas sales (Mcf)                                      751,109       790,302

PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
    Total oil sales (Bbls)                           300,535       322,193
    Average per day (Bbls)                             3,377         3,620
    Average price per Bbl                         $    29.09    $    21.10

Gas:
    Total gas sales (Mcf)                          1,533,308     1,473,866
    Average per day (Mcf)                             17,228        16,560
    Average price per Mcf                         $     5.30    $     2.52
</Table>

The posted price of oil increased to an average price per barrel of $29.09 per
Bbl in the second quarter of 2003, compared to $21.10 per Bbl in the second
quarter of 2002. The Trustee has been advised by BROG that for the period August
1, 1993, through June 30, 2003, the oil from the Waddell Ranch properties was
being sold under a competitive bid to a third party. The average price of gas
increased from $2.52 per Mcf in the second quarter of 2002 to $5.30 per Mcf in
the second quarter of 2003. This increase is primarily attributable to a
significant increase in gas prices earlier in the year of 2003.

Since the oil and gas sales attributable to the Royalties are based on an
allocation formula that is dependent on such factors as price and cost
(including capital expenditures), the production amounts in the Royalties
section of the above table do not provide a meaningful comparison. Oil and gas
sales volumes from the Underlying Properties increased for the applicable period
in 2003 compared to 2002.


                                       10
<PAGE>

Capital expenditures for drilling, remedial and maintenance activities on the
Waddell Ranch properties during the second quarter of 2003 totaled $2,589,000 as
compared to $802,000 for the second quarter of 2002. BROG has informed the
Trustee that the 2003 capital expenditures budget has been revised to $9.9
million for the Waddell Ranch. The total amount of capital expenditures for 2002
was $9.6 million. Through the second quarter of 2003, capital expenditures of
$5.5 million have been expended.

The Trustee has been advised that there were no wells completed or in progress
and 11 workover wells completed and 46 workover wells in progress during the
three months ended June 30, 2003 as compared to 1 well for the three months
ended June 30, 2002 on the Waddell Ranch properties.

Lease operating expense and property taxes totaled $2.6 million for the second
quarter of 2003, compared to $2.0 million in the second quarter of 2002 on the
Waddell Ranch properties. This increase is primarily attributable to higher
maintenance costs for the quarter.

SIX MONTHS ENDED JUNE 30, 2003 AND 2002

For the six months ended June 30, 2003, royalty income received by the Trust
amounted to $15,552,724 compared to royalty income of $10,228,540 for the six
months ended June 30, 2002. The increase in royalty income is primarily due to
an increase in oil and gas prices in the first six months of 2003, compared to
the first six months in 2002. Interest income for the six months ended June 30,
2003 was $6,935 compared to $7,892 for the six months ended June 30, 2002. The
decrease in interest income is attributable primarily to a decrease in interest
rate. General and administrative expenses for the six months ended June 30, 2003
were $365,133. During the six months ended June 30, 2002, general and
administrative expenses were $295,379. The increase in general and
administrative expenses is primarily due to timing differences in the receipt
and payment of these expenses.

These transactions resulted in distributable income for the six months ended
June 30, 2003 of $15,194,526, or $0.326001, per Unit. For the six months ended
June 30, 2002, distributable income was $9,941,053 or $0.213287 per Unit.

Royalty income for the Trust for the period ended June 30, 2003 is associated
with actual oil and gas production for the period November 2002 through April
2003 from the properties from which the Royalties were carved. Oil and gas
production attributable to the Royalties and the properties from which the
Royalties were carved are as follows:

<Table>
<Caption>
                                                       FIRST SIX MONTHS
                                                   -------------------------
                                                      2003          2002
                                                   -----------   -----------
<S>                                                <C>           <C>
ROYALTIES:
Oil sales (Bbls)                                       335,295       366,168
Gas sales (Mcf)                                      1,447,228     1,549,944
</Table>



                                       11
<PAGE>

<Table>
<Caption>
                                                       FIRST SIX MONTHS
                                                   -------------------------
                                                      2003          2002
                                                   -----------   -----------
<S>                                                <C>           <C>
PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
    Total oil sales (Bbls)                             608,513       646,102
    Average per day (Bbls)                               3,362         3,570
    Average price per Bbl                          $     28.95   $     19.03
Gas:
    Total gas sales (Mcf)                            3,091,962     3,029,372
    Average per day (Mcf)                               17,083        16,737
    Average price per Mcf                          $      4.64   $      2.44
</Table>

The average price of oil increased during the six months ended June 30, 2003 to
$28.95 per barrel compared to $19.03 per barrel for the same period in 2002. The
increase in the average price of oil is primarily due to increased demand in
2003, caused by a worldwide political turmoil. The increase in the average price
of gas from $2.44 per Mcf for the six months ended June 30, 2002 to $4.64 per
Mcf for the six months ended June 30, 2003 is primarily the result of an
increase in the spot prices of natural gas.

Since the oil and gas sales volumes attributable to the Royalties are based on
an allocation formula that is dependent on such factors as price and cost
(including capital expenditures), the production amounts in the Royalties
section of the above table do not provide a meaningful comparison. The oil and
gas sales volumes from the properties from which the Royalties are carved have
remained relatively constant for the applicable period of 2003 compared to 2002.

The Trust has been advised that 2 gross and 1 net productive oil wells were
drilled and completed on the Waddell Ranch properties during the six months
ended June 30, 2003 and during the six months ended June 30, 2002. Capital
expenditures for the Waddell Ranch properties for the six months ended June 30,
2003 totaled $5.5 million compared to $1.7 million for the same period in 2002.
BROG has previously advised the Trust that the remaining 2003 capital
expenditures budget for the Waddell Ranch properties is $4.1 million.

Lease operating expense and property taxes totaled $ 5.1 million in 2003
compared to $4.0 million in 2002. The increase in lease operating expense is
primarily attributable to more workover activity and higher electrical costs.


                                       12
<PAGE>
CALCULATION OF ROYALTY INCOME

The Trust's royalty income is computed as a percentage of the net profit from
the operation of the properties in which the Trust owns net overriding royalty
interests. These percentages of net profits are 75% and 95% in the case of the
Waddell Ranch properties and the Texas Royalty properties, respectively. Royalty
income received by the Trust for the three months ended June 30, 2003 and 2002,
respectively, were computed as shown in the table below:

<Table>
<Caption>
                                                                 THREE MONTHS ENDED JUNE 30,
                                                --------------------------------------------------------
                                                    2003          2002           2003            2002
                                                -----------    -----------    -----------    -----------
                                                 WADDELL        WADDELL         TEXAS          TEXAS
                                                  RANCH          RANCH         ROYALTY        ROYALTY
                                                PROPERTIES     PROPERTIES     PROPERTIES     PROPERTIES
                                                -----------    -----------    -----------    -----------
<S>                                             <C>            <C>            <C>            <C>
Gross proceeds of sales from the
    Underlying Properties
    Oil proceeds                                $ 6,190,324    $ 4,929,892    $ 2,551,055    $ 1,867,653
    Gas proceeds                                  7,104,296      3,262,024      1,027,711        449,972
                                                -----------    -----------    -----------    -----------
                Total                            13,294,620      8,191,916      3,578,766      2,317,625
                                                -----------    -----------    -----------    -----------

Less:
    Severance tax:
        Oil                                         265,323        207,630         93,928         68,646
        Gas                                         459,864        176,508         71,034         33,712
    Lease operating expense and property tax:
        Oil and gas                               2,576,893      2,041,205        238,330        180,000
    Capital expenditures                          2,589,006        802,099
    Other                                                            3,397
                                                -----------    -----------    -----------    -----------
                Total                             5,891,086      3,230,839        403,292        282,358
                                                -----------    -----------    -----------    -----------

Net profits                                       7,403,534      4,961,077      3,175,474      2,035,267
Net overriding royalty interests                         75%            75%            95%            95%
                                                -----------    -----------    -----------    -----------
Royalty income                                  $ 5,552,650    $ 3,720,808    $ 3,016,700    $ 1,933,504
                                                ===========    ===========    ===========    ===========
</Table>

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 judgment areas in the
application of accounting policies that currently affect the Trust's financial
condition and results of operations.


                                       13
<PAGE>

Basis of Accounting

The financial statements of the Trust are prepared on a modified cash basis and
are not intended to present financial positions and results of operations in
conformity with accounting principles generally accepted in the United States of
America. Preparation of the Trust's financial statements on such basis includes
the following:

-        Royalty income and interest income are recorded in the period in which
         amounts are received by the Trust rather than in the period of
         production and accrual, respectively.

-        General and administrative expenses recorded are based on liabilities
         paid and cash reserves established out of cash received.

-        Amortization of the Royalty Interests is calculated on a
         unit-of-production basis and charged directly to trust corpus when
         revenues are received.

-        Distributions to Unitholders are recorded when declared by the Trustee
         (see Note 4).

The financial statements of the Trust differ from financial statements prepared
in accordance with accounting principles generally accepted in the United States
of America because royalty income is not accrued in the period of production,
general and administrative expenses recorded are based on liabilities paid and
cash reserves established rather than on an accrual basis, and amortization of
the Royalty Interests is not charged against operating results.

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 and sold for the twelve-month period ended September
30th in that calendar year. Royalty income received by the Trust in the second
quarter of 2003 generally reflects the proceeds, on an entitlements basis, from
natural gas produced and sold in the first quarter of 2003.

Reserve Disclosure

As of January 1, 2003, independent petroleum engineers estimated 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.



                                       14
<PAGE>
Contingencies

Contingencies related to the Underlying 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
Unitholders. The Trustee is aware of no such items as of June 30, 2003.

New Accounting Pronouncements

SFAS No. 149, "Accounting for Derivative Instruments and Hedging Activities, an
amendment of FASB Statement No. 133" was issued in April 2003 and is effective
for contracts entered into after June 20, 2003. The statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts. The Trust
has no derivative instruments and accordingly, the impact of this new standard
will not be material to the financial statements of the Trust.

SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equities" was issued in May 2003, and is effective for
fiscal quarters beginning after June 15, 2003. The Trust has no Financial
Instruments and accordingly, the impact of this new standard will not be
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 June 30, 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.

Use of Estimates

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

Forward-Looking Statements

This report on Form 10-Q includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact included in this Form 10-Q, including,
without limitation, statements contained in this "Trustee's Discussion and




                                       15
<PAGE>

Analysis of Financial Condition and Results of Operations" regarding the Trust's
financial position and industry conditions, are forward-looking statements.
Although the Trustee believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Trust's market risk, as disclosed in
the Trust's annual report on Form 10-K for the fiscal year ended December 31,
2002.


ITEM 4. CONTROLS AND PROCEDURES.

         As of the end of the period covered by 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-15
and 15d-15. 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. In its
evaluation of disclosure controls and procedures, the Trustee has relied, to the
extent considered reasonable, on information provided by Burlington Resources
Oil & Gas Company and River Hill Energy Corporation. There has not been any
change in the Trust's internal control over financial reporting during the
period covered by this report that has materially affected, or is reasonably
likely to materially affect, the Trust's internal control over financial
reporting.



                                       16
<PAGE>
                           PART II - OTHER INFORMATION


ITEMS 1 THROUGH 5.

Not applicable.


ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

<Table>
<Caption>
Exhibit
Number       Exhibit
-------      -------
<S>          <C>
4.1          --  Permian Basin Royalty Trust Indenture dated November 3, 1980,
                 between Southland Royalty Company (now Burlington Resources Oil
                 & Gas Company) and The First National Bank of Fort Worth (now
                 Bank of America, N.A.), as Trustee, heretofore filed as Exhibit
                 (4)(a) to the Trust's Annual Report on Form 10-K to the
                 Securities and Exchange Commission for the fiscal year ended
                 December 31, 1980 is incorporated herein by reference.*

4.2          --  Net Overriding Royalty Conveyance (Permian Basin Royalty
                 Trust) from Southland Royalty Company (now Burlington Resources
                 Oil & Gas Company) to The First National Bank of Fort Worth
                 (now Bank of America, N.A.), as Trustee, dated November 3, 1980
                 (without Schedules), heretofore filed as Exhibit (4)(b) to the
                 Trust's Annual Report on Form 10-K to the Securities and
                 Exchange Commission for the fiscal year ended December 31, 1980
                 is incorporated herein by reference.*

4.3          --  Net Overriding Royalty Conveyance (Permian Basin Royalty
                 Trust - Waddell Ranch) from Southland Royalty Company (now
                 Burlington Resources Oil & Gas Company) to The First National
                 Bank of Fort Worth (now Bank of America, N.A.), as Trustee,
                 dated November 3, 1980 (without Schedules), heretofore filed as
                 Exhibit (4)(c) to the Trust's Annual Report on Form 10-K to the
                 Securities and Exchange Commission for the fiscal year ended
                 December 31, 1980 is incorporated herein by reference.*

31.1         --  Certification by Ron E. Hooper, Senior Vice President and
                 Trust Administrator of Bank of America, Trustee of Permian
                 Basin Royalty Trust, dated August 13, 2003 and submitted
                 pursuant to Rule 13a-15(e)/15d-15(e) and pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

32.1         --  Certificate by Bank of America, Trustee of Permian Basin
                 Royalty Trust, dated August 13, 2003 and submitted pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
                 Section 1350).
</Table>


                                       17
<PAGE>

* A copy of this Exhibit is available to any Unit holder, at the actual cost of
reproduction, upon written request to the Trustee, Bank of America, N.A., P.O.
Box 830650, Dallas, Texas 75202.

     (b) Reports on Form 8-K.

         On July 24, 2003, the Trust filed a report on Form 8-K indicating that
         the Company issued a press release announcing its monthly cash
         distribution to unitholders of record on July 31, 2003.

         On June 24 2003, the Trust filed a report on Form 8-K indicating that
         the Company issued a press release announcing its monthly cash
         distribution to unitholders of record on June 30, 2003.

         On May 21, 2003, the Trust filed a report on Form 8-K indicating that
         the Company issued a press release announcing its monthly cash
         distribution to unitholders of record on May 30, 2003.



                                       18
<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.

                                             BANK OF AMERICA, N.A.,
                                             TRUSTEE FOR THE
                                             PERMIAN BASIN ROYALTY TRUST


                                             By /s/ RON E. HOOPER
                                               -------------------------------
                                                      Ron E. Hooper
                                                      Senior Vice President
                                                      Trust Administrator

Date: August 13, 2003


              (The Trust has no directors or executive officers.)



                                       19
<PAGE>
                                INDEX TO EXHIBITS


<Table>
<Caption>
Exhibit
Number      Exhibit
-------     -------
<S>         <C>  <C>
4.1         --   Permian Basin Royalty Trust Indenture dated November 3, 1980,
                 between Southland Royalty Company (now Burlington Resources Oil
                 & Gas Company) and The First National Bank of Fort Worth (now
                 Bank of America, N.A.), as Trustee, heretofore filed as Exhibit
                 (4)(a) to the Trust's Annual Report on Form 10-K to the
                 Securities and Exchange Commission for the fiscal year ended
                 December 31, 1980 is incorporated herein by reference.*

4.2         --   Net Overriding Royalty Conveyance (Permian Basin Royalty
                 Trust) from Southland Royalty Company (now Burlington Resources
                 Oil & Gas Company) to The First National Bank of Fort Worth
                 (now Bank of America, N.A.), as Trustee, dated November 3, 1980
                 (without Schedules), heretofore filed as Exhibit (4)(b) to the
                 Trust's Annual Report on Form 10-K to the Securities and
                 Exchange Commission for the fiscal year ended December 31, 1980
                 is incorporated herein by reference.*

4.3         --   Net Overriding Royalty Conveyance (Permian Basin Royalty
                 Trust - Waddell Ranch) from Southland Royalty Company (now
                 Burlington Resources Oil & Gas Company) to The First National
                 Bank of Fort Worth (now Bank of America, N.A.), as Trustee,
                 dated November 3, 1980 (without Schedules), heretofore filed as
                 Exhibit (4)(c) to the Trust's Annual Report on Form 10-K to the
                 Securities and Exchange Commission for the fiscal year ended
                 December 31, 1980 is incorporated herein by reference.*

31.1        --   Certification by Ron E. Hooper, Senior Vice President and
                 Trust Administrator of Bank of America, Trustee of Permian
                 Basin Royalty Trust, dated August 13, 2003 and submitted
                 pursuant to Rule 13a-15(e)/15d-15(e) and pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

32.1        --   Certificate by Bank of America, Trustee of Permian Basin
                 Royalty Trust, dated August 13, 2003 and submitted pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
                 Section 1350).

</Table>

*        A copy of this Exhibit is available to any Unit holder, at the actual
         cost of reproduction, upon written request to the Trustee, Bank of
         America, N.A., P.O. Box 830650, Dallas, Texas 75202.