<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 SEPTEMBER 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 Identification No.)
 Incorporation or Organization)

                              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 Security Exchange Act of 1934). Yes [ ] No [X]

         Number of Units of beneficial interest of the Trust outstanding at
November 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 September 30,
2003, and the distributable income and changes in trust corpus for the
three-month and nine-month periods ended September 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 September 30, 2003
and for the three-month and nine-month periods ended September 30, 2003 and 2002
as stated in their report appearing 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 the Permian Basin Royalty Trust as of September 30, 2003 and the
related condensed statements of distributable income and changes in trust corpus
for the three-month and nine-month periods ended September 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
November 12, 2003

                                       3

<PAGE>

PERMIAN BASIN ROYALTY TRUST

CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS

<TABLE>
<CAPTION>
                                                          September 30,      December 31,
                                                              2003                2002
                                                         --------------     -------------
                                                          (Unaudited)
<S>                                                      <C>                <C>
ASSETS
Cash and short-term investments                          $    3,215,037     $   2,371,387
Net overriding royalty interests in
    producing oil and gas properties (net of
    accumulated amortization of $8,936,913,
    and $8,802,823 at September 30, 2003 and
    December 31, 2002, respectively)                     $    2,038,303         2,172,393
                                                         --------------     -------------

TOTAL ASSETS                                             $    5,253,340     $   4,543,780
                                                         ==============     =============

LIABILITIES AND TRUST CORPUS

Distribution payable to Unit holders                     $    3,215,037     $   2,371,387

Commitments and contingencies
Trust corpus - 46,608,796 Units of
    beneficial interest authorized and
    outstanding                                          $    2,038,303         2,172,393
                                                         --------------     -------------

TOTAL LIABILITIES
      AND TRUST CORPUS                                   $    5,253,340     $   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                     Nine Months Ended
                                            September 30                           September 30
                                 ----------------------------------    ------------------------------------
                                        2003              2002               2003               2002
                                 ----------------   ---------------    ----------------   -----------------
<S>                              <C>                <C>                <C>                <C>
Royalty income                   $      8,692,172   $     6,305,922    $     24,244,896   $      16,534,462
Interest income                             3,468             4,319              10,402              12,211
                                 ----------------   ---------------    ----------------   -----------------
                                        8,695,640         6,310,241          24,255,298          16,546,673
General and administrative
    expenditures                           71,646            69,703             436,780             365,082
                                 ----------------   ---------------    ----------------   -----------------

Distributable income             $      8,623,994   $     6,240,538    $     23,818,518   $      16,181,591
                                 ================   ===============    ================   =================

Distributable income per Unit
    (46,608,796 Units)           $        .185029   $       .133892    $        .511031   $         .347179
                                 ================   ===============    ================   =================
</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             Nine Months Ended
                                                   September 30                   September 30
                                           ---------------------------    ---------------------------
                                              2003             2002           2003           2002
                                           -----------     -----------    ------------   ------------
<S>                                        <C>             <C>            <C>            <C>
Trust corpus, beginning of period          $ 2,085,667     $ 2,272,994    $  2,192,393   $  2,371,187

Amortization of net overriding royalty
    interests                                  (47,364)        (47,988)       (134,090)      (146,181)
Distributable income                         8,623,994       6,240,538      23,818,518     16,181,591
Distributions declared                      (8,623,994)     (6,240,538)    (23,818,518)   (16,181,591)
                                           -----------     -----------    ------------   ------------
Total Trust Corpus, end of period          $ 2,038,303     $ 2,225,006    $  2,038,303   $  2,225,006
                                           ===========     ===========    ============   ============

Distributions per unit                     $   .185029     $   .133892    $    .511031   $    .347179
                                           ===========     ===========    ============   ============
</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:

-        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.

-        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>

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

-        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. 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 September 30, 2003.

FIN No. 46, "Consolidated 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 interim or annual period ending
after December 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.

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.

                                       8

<PAGE>

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 September 30, 2003, the Trust declared a distribution on October
21, 2003 of $.055448 payable on November 17, 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 SEPTEMBER 30, 2003 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2002

For the quarter ended September 30, 2003 royalty income received by the Trust
amounted to $8,692,172 compared to royalty income of $6,305,922 during the third
quarter of 2002. The increase royalty income is primarily attributable to
significant increases in both oil and gas prices.

Interest income for the quarter ended September 30, 2003, was $3,468 compared to
$4,319 during the third quarter of 2002. The decrease in interest income is
primarily attributable to lower interest rates. General and administrative
expenses during the third quarter of 2003 amounted to $71,646 compared to
$69,703 during the third quarter of 2002. The increase in general and
administrative expenses can be primarily attributed to the timing of payment of
expenses.

These transactions resulted in distributable income for the quarter ended
September 30, 2003 of $8,623,994 or $.18 per Unit of beneficial interest.
Distributions of $.054215, $.061834 and

                                       9

<PAGE>

$.068979 per Unit were made to Unit holders of record as of July 31, August 29
and September 30, 2003, respectively. For the third quarter of 2002,
distributable income was $6,240,538, or $.13 per Unit of beneficial interest.

Royalty income for the Trust for the third quarter of the calendar year is
associated with actual oil and gas production for the period of May, June and
July 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:

                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                                 THIRD QUARTER
                                                          --------------------------
                                                              2003           2002
                                                          ------------    ----------
<S>                                                       <C>             <C>
ROYALTIES:
Oil sales (Bbls)                                               183,456       177,014
Gas sales (Mcf)                                                859,067       767,274

PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
    Total oil sales (Bbls)                                     300,864       317,453
    Average per day (Bbls)                                       3,270         3,451
    Average price per Bbl                                 $      27.85    $    24.41

Gas:
    Total gas sales (Mcf)                                    1,589,614     1,565,863
    Average per day (Mcf)                                       17,278        17,020
    Average price per Mcf                                 $       4.71    $     2.99
</TABLE>

The posted price of oil increased to an average price per barrel of $27.85 per
Bbl in the third quarter of 2003, compared to $24.41 per Bbl in the third
quarter of 2002. The Trustee has been advised by BROG that for the period August
1, 1993, through September 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 $2.99 per Mcf in the third quarter of 2002 to $4.71 per Mcf
in the third 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.

Capital expenditures for drilling, remedial and maintenance activities on the
Waddell Ranch properties during the third quarter of 2003 totaled $1,479,891 as
compared to $1,434,435 for the third quarter of 2002. BROG has informed the
Trustee that the 2003 capital expenditures budget has been revised to $9.1
million for the Waddell Ranch. The total amount of capital expenditures for 2002
was $9.6 million. Through the third quarter of 2003, capital expenditures of
$7.0 million have been expended.

The Trustee has been advised that there were 2 wells completed or in progress
during the three months ended September 30, 2003 as compared to 3 wells for the
three months ended September 30, 2002 on the Waddell Ranch properties.

Lease operating expense and property taxes totaled $2.5 million for the third
quarter of 2003, compared to $2.4 million in the third quarter of 2002 on the
Waddell Ranch properties. This increase is primarily attributable to higher
maintenance costs for the quarter.

                                       11

<PAGE>

NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

For the nine months ended September 30, 2003, royalty income received by the
Trust amounted to $24,244,896 compared to royalty income of $16,534,462 for the
nine months ended September 30, 2002. The increase in royalty income is
primarily due to a increase in both oil and gas prices in the first nine months
of 2003, compared to the first nine months in 2002. Interest income for the nine
months ended September 30, 2003 was $10,402 compared to $12,211 for the nine
months ended September 30, 2002. The decrease in interest income is attributable
primarily to a decrease in lower interest rates. General and administrative
expenses for the nine months ended September 30, 2003 were $436,780. During the
nine months ended September 30, 2002, general and administrative expenses were
$365,082. 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 nine months ended
September 30, 2003 of $23,818,518, or $.51 per Unit. For the nine months ended
September 30, 2002, distributable income was $16,181,591, or $.35 per Unit.

Royalty income for the Trust for the period ended September 30, 2003 is
associated with actual oil and gas production for the period November 2002
through July 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 NINE MONTHS
                                                          --------------------------
                                                              2003           2002
                                                          ------------    ----------
<S>                                                       <C>             <C>
ROYALTIES:
Oil sales (Bbls)                                               518,481       543,182
Gas sales (Mcf)                                              2,306,295     2,317,218

PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
    Total oil sales (Bbls)                                     909,377       963,555
    Average per day (Bbls)                                       3,331         3,530
    Average price per Bbl                                 $      28.59    $    20.80
Gas:
    Total gas sales (Mcf)                                    4.681,576     4,595,235
    Average per day (Mcf)                                       17,149        16,832
    Average price per Mcf                                 $       4.67    $     2.62
</TABLE>

The average price of oil increased during the nine months ended September 30,
2003 to $28.59 per barrel compared to $20.80 per barrel for the same period in
2002. The increase in the average price of oil is primarily due to increasing
demand in 2003, caused by overseas hostilities. The increase in the average
price of gas from $2.62 per Mcf for the nine months ended September 30, 2002 to
$4.67 per Mcf for the nine months ended September 30, 2003 is primarily the
result of a 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

                                       12

<PAGE>

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 4 gross and 1 net productive oil wells were
drilled and completed on the Waddell Ranch properties during the nine months
ended September 30, 2003 as compared to 8 gross and 3 net productive well during
the same period in 2002. Capital expenditures for the Waddell Ranch properties
for the nine months ended September 30, 2003 totaled $7.0 million compared to
$3.1 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 $2.1 million.

Lease operating expense and property taxes totaled $7.7 million in 2003 compared
to $6.5 million in 2002. The increase in lease operating expense is primarily
attributable to more activity on the Waddell Ranch properties.

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 September 30, 2003 and
2002, respectively, were computed as shown in the table below:

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED SEPTEMBER 30,
                                          ----------------------------------------------------------------------
                                                          2003                               2002
                                          ----------------------------------  ----------------------------------
                                               WADDELL            TEXAS           WADDELL            TEXAS
                                                RANCH            ROYALTY           RANCH            ROYALTY
                                              PROPERTIES       PROPERTIES        PROPERTIES        PROPERTIES
                                          ----------------  ---------------   ----------------  ----------------
<S>                                       <C>               <C>               <C>               <C>
Gross proceeds of sales from the
    Underlying Properties
    Oil proceeds                          $      6,086,789  $     2,291,291   $      5,534,415  $      2,213,128
    Gas proceeds                                 6,626,340          867,421          4,092,292           584,290
                                          ----------------  ---------------   ----------------  ----------------
                      Total                     12,713,129        3,158,712          9,626,707         2,797,418
                                          ----------------  ---------------   ----------------  ----------------

Less:
    Severance tax:
        Oil                                        262,812           87,739            231,781            89,237
        Gas                                        438,299           29,099            228,661            40,568
    Lease operating expense and
        property tax:
        Oil and gas                              2,548,606          195,000          2,435,911           180,000
    Capital expenditures                         1,479,890                           1,434,435
    Other                                                                               38,999
                                          ----------------  ---------------   ----------------  ----------------
                      Total                      4,729,607          311,837          4,369,787           309,805
                                          ----------------  ---------------   ----------------  ----------------

Net profits                                      7,983,522        2,846,875          5,256,920         2,487,613
Net overriding royalty interests                        75%              95%                75%               95%
                                          ----------------  ---------------   ----------------  ----------------
Royalty income                            $      5,987,641  $     2,704,531   $      3,942,690  $      2,363,232
                                          ================  ===============   ================  ================
</TABLE>

                                       13

<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Trust's financial statements reflecting 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.

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 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 third
quarter of 2003 generally reflects the proceeds, on an entitlements basis, from
natural gas produced and sold in the second 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.

                                       14

<PAGE>

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 reserves estimates.

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 September 30, 2003.

NEW ACCOUNTING PRONOUNCEMENTS

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 September 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 interim or annual period ending
after December 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 effect 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
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.

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<PAGE>

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

            (4)(a)      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)(b)      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)(c)      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 November 14, 2003 and
                        submitted pursuant to Rule 13a-14(a)/15d-14(a) 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 November 14, 2003 and submitted
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002 (18 U.S.C. Section 1350).

                                       17

<PAGE>

            There were no reports on Form 8-K filed during the quarter ended
September 30, 2003. The following reports were furnished on Form 8-K during and
subsequent to the quarter ended September 30, 2003.

On August 21, 2003, the Trust furnished a report on Form 8-K indicating that the
Company issued a press release announcing its monthly cash distribution to
unitholders of record on August 29, 2003.

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

On October 22, 2003, the Trust furnished a report on Form 8-K indicating that
the Company and subsequent to issued a press release announcing its monthly cash
distribution to unitholders of record on October 31, 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:  November 12, 2003

               (The Trust has no directors or executive officers.)

                                       19

<PAGE>

                                INDEX TO EXHIBITS

Sequentially
Numbered      Exhibit
Page          Number       Exhibit

              (4)(a)    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.*

              (b)       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.*

              (c)       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 November 14, 2003 and
                        submitted pursuant to Rule 13a-14(a)/15d-14(a) 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 November 14, 2003 and submitted
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002 (18 U.S.C. Section 1350).

* 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.

                                       20