SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                               Form 10-Q

             Quarterly Report Pursuant To Section 13 or 15(d)
                 of the Securities Exchange Act of 1934


              For the Quarterly Period Ended September 30, 1998

                     Commission File No. 1-8033

                     PERMIAN BASIN ROYALTY TRUST

Texas                                            I.R.S. No. 75-6280532


               NationsBank, N.A., Trust Department
                             P. O. Box 1317
                        Fort Worth, Texas 76101

                    Telephone Number 817/390-6905 


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 and (2) has been
subject to such filing requirements for the past 90 days.  Yes X  
No___

Number of Units of beneficial interest outstanding at November 12,
1998:  46,608,796

                          Page 1 of 17

<PAGE>
                    PERMIAN BASIN ROYALTY TRUST

                   PART I - FINANCIAL STATEMENTS


ITEM 1.  FINANCIAL STATEMENTS

The condensed financial statements included herein have been prepared
by NationsBank, 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, 1998, and the
distributable income and changes in trust corpus for the three-month
and nine-month periods ended September 30, 1998 and 1997 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, 1998 and for the three-month and nine-month periods ended
September 30, 1998 and 1997 included herein.

                                 -2-
<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

NationsBank, 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, 1998 and the related condensed statements of
distributable income and changes in trust corpus for the three-month
and nine-month periods ended September 30, 1998 and 1997.  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
generally accepted auditing standards, 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.

The accompanying condensed financial statements are prepared on a
modified cash basis as described in Note 1, which is a comprehensive
basis of accounting other than generally accepted accounting
principles.

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 generally accepted
auditing standards, the statement of assets, liabilities and trust
corpus of the Permian Basin Royalty Trust as of December 31, 1997, 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 20, 1998, 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, 1997 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

October 23, 1998

                                 -3-

<PAGE>
<TABLE>
<CAPTION>

PERMIAN BASIN ROYALTY TRUST
CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
---------------------------------------------------------------------------------------------------------------
                                                                    September 30,    December 31,
ASSETS                                                                  1998             1997
                                                                     (Unaudited)

<S>                                                               <C>              <C>         
Cash and short-term investments                                     $ 1,488,594     $ 1,724,192
Net overriding royalty interests in producing
   oil and gas properties (net of accumulated
   amortization of $7,599,889 and $7,478,622
   at September 30, 1998 and December 31, 1997,
   respectively)                                                      3,375,327       3,496,594
                                                                      ---------       ---------
                                                                    $ 4,863,921     $ 5,220,786
                                                                      =========       =========
LIABILITIES AND TRUST CORPUS

Distribution payable to Unit holders                                $ 1,488,594     $ 1,724,192
Commitments and contingencies
Trust corpus - 46,608,796 Units of beneficial
   interest authorized and outstanding                                3,375,327       3,496,594
                                                                      ---------       ---------
                                                                    $ 4,863,921     $ 5,220,786
                                                                      =========       =========

<CAPTION>

CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)
--------------------------------------------------------------------------------------------------------------

                                             Three Months Ended             Nine Months Ended
                                                September 30,                 September 30,
                                        ----------------------------  ----------------------------
                                             1998          1997           1998            1997

<S>                                      <C>          <C>             <C>            <C>        
Royalty income                           $ 2,406,272   $ 4,392,956     $ 9,258,812   $17,283,217
Interest income                                1,997         8,385          19,910        33,924
                                           ---------     ---------       ---------     ---------
                                           2,408,269     4,401,341       9,278,722    17,317,141
                                                                                  
General and administrative                                                                      
   expenditures                               50,890        58,067         323,892       379,607
                                           ---------     ---------       ---------     ---------
Distributable income                     $ 2,357,379   $ 4,343,274     $ 8,954,830   $16,937,534
                                           =========     =========       =========     =========
Distributable income per Unit
   (46,608,796 Units)                    $   .050578   $   .093186     $   .192128   $   .363397
                                           =========     =========       =========     =========

<FN>
The accompanying notes to condensed financial statements are an integral part of these statements.
</FN>
</TABLE>

                                   -4-
<PAGE>
<TABLE>
<CAPTION>

PERMIAN BASIN ROYALTY TRUST

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)
---------------------------------------------------------------------------------------------------------------

                                               Three Months Ended           Nine Months Ended    
                                                September 30,                 September 30,
                                        ----------------------------  ----------------------------
                                             1998          1997           1998            1997

<S>                                      <C>          <C>             <C>           <C>         
Trust corpus, beginning of period           3,411,371  $ 3,620,815       3,496,594   $ 3,760,939
Amortization of net overriding                                                                  
   royalty interests                          (36,044)     (57,746)       (121,267)     (197,870)
Distributable income                        2,357,379    4,343,274       8,954,830    16,937,534
Distributions declared                     (2,357,379)  (4,343,274)     (8,954,830)  (16,937,534)
                                           ----------   ----------     -----------    ---------- 
Trust corpus, end of period                 3,375,327  $ 3,563,069       3,375,327   $ 3,563,069
                                           ==========   ==========      ==========    ========== 

<FN>
The accompanying notes to condensed financial statements are an integral part of this statement.
</FN>
</TABLE>

                                   -5-
<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 NationsBank, N.A. ("Trustee") as Trustee for the Trust by
        the interest owners: Burlington Resources Oil & Gas Company
        ("BROG") for the Waddell Ranch properties and Riverhill Energy
        Corporation ("Riverhill Energy"), formerly a wholly owned
        subsidiary of Riverhill Capital Corporation ("Riverhill 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 Riverhill 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 that are subject to the
        Net Overriding Royalty Conveyance to the Trust dated effective
        November 1, 1980 ("Conveyance") to Riverhill 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 Riverhill Capital.  Prior to such
        acquisition by Schlumberger, CMC and Riverhill Energy were wholly
        owned subsidiaries of Riverhill Capital.  The Trustee has further
        been advised that in connection with Schlumberger's acquisition
        of Riverhill Capital, the shareholders of Riverhill Capital
        acquired ownership of all of the shares of stock of Riverhill
        Energy.  Thus, the ownership in the Texas Royalty properties
        referenced above remained in Riverhill Energy, the stock
        ownership of which was acquired by the former shareholders of
        Riverhill Capital.  Accounting operations pertaining to the Texas
        Royalty properties are being performed by CMC under the direction
        of Riverhill Energy.  CMC also currently conducts all field,
        technical and accounting operations on behalf of BROG with regard
        to the Waddell Ranch properties.

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

     -  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

                                     -6-

        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 (see Note 3).

     The financial statements of the Trust differ from financial
     statements prepared in accordance with generally accepted
     accounting principles ("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 prepared in accordance with GAAP. Amortization
     of the Royalties calculated on a unit-of-production basis is
     charged directly to trust corpus.

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 of the Trust 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.  As a result
     of the Tax Reform Act of 1986, royalty income will generally be
     treated as portfolio income and will not offset passive losses.

3.   EXCESS COSTS

     In the calculation of royalty income for the months of June through
     September 1998, costs exceeded revenues for the Waddell Ranch
     properties underlying the Waddell Ranch Net Overriding Royalty
     Conveyance by $908,510.  Such excess costs plus accrued interest
     must be recovered from future net proceeds of the underlying
     Waddell Ranch properties before these properties can again
     contribute to Trust royalty income.  See also Note 5 with respect
     to the Texas Royalty properties.

4.   CONTINGENCIES

     See Item 1 Legal Proceedings concerning the status of litigation
     matters.

5.   SUBSEQUENT EVENTS.

     During the month of September 1998, the Trust received and recorded
     as royalty income $1,041,340 representing amounts that the Trust
     had been advised had been previously held in suspense by BROG
     relating to the Texas Royalty properties.  The Trustee has been
     advised that these amounts relate to revenues received by BROG
     prior to conveyance of its interest in the Texas Royalty properties
     to Riverhill Energy in February 1998.  This amount was included in
     the October 15, 1998 distribution to Unit Holders of record on
     September 30, 1998.  Subsequently, Riverhill Energy advised the
     Trustee that an overpayment to the Trust was made in September 1998
     with regard to such suspended funds in the amount of $521,183. 
     Pursuant to the provisions of the Texas Royalty Net Overriding
     Conveyance dated effective November 1, 1980, Riverhill Energy has
     offset the overpayment against royalty income attributable to the
     Texas Royalty properties for the month of October 1998 leaving a
     net amount due as a result of such overpayment of $172,648.  Such
     amount must be recovered from future net proceeds 

                                     -7-

     attributable to the underlying Texas Royalty properties before
     these properties can again contribute to the Trust royalty income.

     The Trustee has been further advised that interest on such
     suspended funds will be paid by BROG and/or Riverhill Energy.  The
     exact amount of such interest payment and when such will be made
     cannot be determined at this time.

     In calculating Trust royalty income for the month of October 1998,
     costs exceeded revenues by $755,068 for the Waddell Ranch
     properties underlying the Waddell Ranch Net Overriding Royalty
     Conveyance, dated effective November 1, 1980.  Excess costs from
     one conveyance cannot reduce royalty income computed under another
     conveyance.  Therefore, cumulative excess costs of $1,663,578 as of
     October 1998 plus accrued interest must be recovered from future
     net proceeds attributable to the underlying Waddell Ranch
     properties before these properties can again contribute to Trust
     royalty income.

     As has been previously reported, the Trustee was notified in the
     third quarter of 1996 of the settlement of a class action lawsuit
     pending in the 270th District Court of Harris County, Texas (the
     "Court"), Cause No. 92-026182 styled Caroline Altheide and Langdon
     Harrison v. Meridian Oil Inc., Meridian Oil Holding Inc., Meridian
     Oil Trading Inc., Meridian Oil Production Inc., Southland Royalty
     Company, El Paso Production Company, Meridian Oil Hydrocarbons
     Inc., Meridian Oil Gathering Inc., Meridian Oil Services Inc., and
     Edward Parker ("Class Action"), in which the Trust is a class
     member.  The judgment approving the settlement of the Class Action
     has been the subject of an appeal.  One of the conditions set forth
     in the settlement agreement for the distribution of the settlement
     proceeds relating to the Class Action is that there would be no
     distribution of settlement proceeds unless and until such judgment
     was no longer subject to further appeal and, if there was an
     appeal, not unless and until such judgment was affirmed or such
     appeal was dismissed and the time for any future proceedings in the
     appellate court of last resort had expired.  The Trustee has been
     advised that such appeal has been dismissed and it is the
     understanding of the Trustee that the conditions and restrictions
     that prevented payment of the settlement proceeds no longer exist. 
     The Trust has now received its portion of the settlement proceeds
     totaling $766,051.  Such settlement proceeds that have been
     received by the Trust will be distributed with the regular monthly
     Trust distribution on November 16, 1998 to the Trust's Unit holders
     of record on October 31, 1998.

                               ******

                                 -8-

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 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.

YEAR 2000 ISSUE

Many existing computer programs use only two digits to identify a year
in the date field.  These programs were designed and developed without
considering the impact of the upcoming change in the century.  If not
corrected, many computer applications could fail or create erroneous
results by or at the Year 2000.  The Year 2000 issue affects virtually
all companies and organizations.  If a company or organization does
not successfully address its Year 2000 issues, it may face material
adverse consequences.

As the Trust does not directly maintain any systems, the Trust will
not incur any direct costs related to the Year 2000 issue.  However,
the Trust is reliant on the performance of third party vendors
("vendors") for the calculation and receipt of Royalty income, payment
of expenses, and disbursement of distributable income.  The Trust has
made formal inquiries to these vendors requesting information on their
state of readiness for the Year 2000.  Through responses received and
reviewed by the Trust with respect to its vendors, all significant
vendors are currently addressing the Year 2000 issue and plan to be
compliant prior to the Year 2000.  However, the Trustee can provide no
assurance as to whether the vendors will successfully address the Year
2000 issue.  Failure to successfully address the Year 2000 issue by
these vendors could have a material adverse impact on the Trust and
its Unit holders.  At this time, the Trust believes the most adverse
impact as a result of the vendors' failure to successfully address the
Year 2000 issue is that the Trust would not receive and in turn would
not be able to distribute royalty income to the Unit holders.

THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

For the quarter ended September 30, 1998, royalty income received by
the Trust amounted to $ 2,406,272 compared to royalty income of
$4,392,956 during the third quarter of 1997.  The decrease in royalty
income is primarily due to a decrease in oil and gas prices in the
third quarter of 1998, compared to the third quarter of 1997, as well
as an increase in allocated capital expenditures in the third quarter
of 1998.  In the calculation of royalty income for the months of July
through September 1998, costs exceeded revenues for the Waddell Ranch
properties underlying the Waddell Ranch Net Overriding Royalty
Conveyance by $512,498.  Such excess costs plus accrued interest must
be recovered from future net proceeds relating to the underlying
Waddell Ranch properties before these properties  can again contribute
to Trust royalty income.  The decrease in royalty income is offset by
the Trust's receipt in September 1998 of $1,041,340 representing its
portion of amounts that had been previously held in suspense by BROG
relating to the Texas Royalty properties.  The Trustee has been
advised that these amounts relate to revenues received by BROG prior
to conveyance of its interest in the Texas Royalty properties to
Riverhill Energy in February 1998.  Subsequent to the third quarter of
1998, Riverhill Energy advised the Trustee that an overpayment to the
Trust was made in September 1998 with regard to such suspended funds
in the amount of $521,183.  See Note 5 for further details on this
overpayment.  Interest income for the quarter ended September 30,
1998, was $1,997 compared to $8,385 during the third quarter of 1997. 
The decrease in interest income is attributable 

                              -9-

primarily to a decrease in funds available for investment.  General
and administrative expenses during the third quarter of 1998 amounted
to $50,890 compared to $58,067 during the third quarter of 1997.  The
decrease in general and administrative expenses can be attributed
primarily to timing differences in the receipt and payment of these
expenses.

These transactions resulted in distributable income for the quarter
ended September 30, 1998, of $2,357,379 or $.050578 per Unit of
beneficial interest.  Distributions of .009560, .009080, and .031938
per Unit were made to Unit holders of record as of July 31, August 31,
and September 30, 1998, respectively.  For the third quarter of 1997,
distributable income was $4,343,274 or $.093186 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
May through July 1998 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>
                                                                            Third Quarter    
                                                                       ---------------------- 
                                                                        1998            1997 
<S>                                                                <C>              <C>      
ROYALTIES:
Oil sales (Bbls)                                                       97,557         183,871
Gas sales (Mcf)                                                       198,019         622,927

PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
  Total oil sales (Bbls)                                              501,903         473,977
  Average per day (Bbls)                                                5,455           5,152
  Average price per Bbl                                                $11.26          $17.75
Gas:
  Total gas sales (Mcf)                                             1,886,462       1,954,889
  Average per day (Mcf)                                                20,505          21,249
  Average price per Mcf                                                 $2.03          $ 2.20

</TABLE>

The posted price of oil decreased for the third quarter of 1998,
compared to the third quarter of 1997, resulting in an average price
per barrel of $11.26 compared to $17.75 in the third quarter of 1997. 
The Trustee has been advised by BROG that for the period August 1,
1993, through June 30, 1999, the oil from the Waddell Ranch properties
was being sold under a competitive bid to a third party. The decrease
in the average price of gas from $2.20 in the third quarter of 1997 to
$2.03 in the third quarter of 1998 is primarily the result of a
decrease in the spot prices of natural gas.

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.  The oil and gas sales from the properties from which the
Royalties are carved were relatively unchanged for the applicable
period in 1998 compared to 1997.

Capital expenditures for drilling, remedial and maintenance activities
on the Waddell Ranch properties during the third quarter of 1998
totaled $4.5 million as compared to $3.9 million for the third quarter
of 1997.  BROG has informed the Trustee that the 1998 capital
expenditures budget is $17.6 million for the Waddell Ranch properties,
of which $12 million has been expended through the third quarter of
1998.  The Trustee has been advised that it is anticipated that the
full amount of the capital expenditure 

                                -10-

budget for the Waddell Ranch properties will be expended by the end of
1998.  The total amount of capital expenditures for 1997 was $11.8
million.

The Trustee has been advised that there were 9 gross (3.875 net) wells
completed on the Waddell Ranch properties during the three months
ended September 30, 1998, and there were 11 gross (5.125 net) wells in
progress.  For the three months ended September 30, 1997, there were
16 gross (7 net) wells completed and there were 11 gross (4.75 net)
wells in progress.

Lease operating expense and property taxes totaled $3.9 million for
the third quarter of 1998, compared to $2.9 million in the third
quarter of 1997.  This increase is primarily attributable to an
increase in lease operating expense on the Waddell Ranch properties
and can be attributed to timing differences in the receipt and payment
of these expenses. 

NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

For the nine months ended September 30, 1998, royalty income received
by the Trust amounted to $9,258,812 compared to royalty income of
$17,283,217 for the nine months ended September 30, 1997.  The
decrease in royalty income is primarily due to a decrease in oil and
gas prices in the first nine months of 1998, compared to the first
nine months in 1997, as well as an increase in allocated capital
expenditures in the first nine months of 1998.  In the calculation of
royalty income for the months of June through September 1998, costs
exceeded revenues for the Waddell Ranch properties underlying the
Waddell Ranch Net Overriding Royalty Conveyance by $908,510.  Such
excess costs plus accrued interest must be recovered from future net
proceeds of the underlying Waddell Ranch properties before these
properties can again contribute to Trust royalty income.  Included in
the distributable income for March 1998 was approximately $1.1 million
which represented the Trust's portion of an approximate $1.5 million
severance tax refund received from the State of Texas by BROG,
operator of record of the Waddell Ranch properties in Crane County,
Texas.  The decrease in royalty income is offset by the Trust's
receipt in September 1998 of $1,041,340 representing its portion of
amounts that had been previously held in suspense by BROG relating to
the Texas Royalty properties.  The Trustee has been advised that these
amounts relate to revenues received by BROG prior to conveyance of its
interest in the Texas Royalty properties to Riverhill Energy in
February 1998.  Subsequent to the third quarter of 1998, Riverhill
Energy advised the Trustee that an overpayment to the Trust was made
in September 1998 with regard to such suspended funds in the amount of
$521,183.  See Note 5 for further details on this overpayment.
Interest income for the nine months ended September 30, 1998 was
$19,910 compared to $33,924 during the nine months ended September 30,
1997.  The decrease in interest income is attributable primarily to a
decrease in funds available for investment.  General and
administrative expenses for the nine months ended September 30, 1998
were $323,892.  During the nine months ended September 30, 1997,
general and administrative expenses were $379,607.  The decrease in
general and administrative expenses is primarily due to timing
differences in the receipt and payment of these expenses.

Distributable income for the nine months ended September 30, 1998 was
$8,954,830 or $.192128 per Unit.  For the nine months ended
September 30, 1997, distributable income was $16,937,534 or $.363397
per Unit.

                                -11-

Royalty income for the Trust for the period ended September 30, 1998
is associated with actual oil and gas production for the period
November 1997 through July 1998 from the properties from which the
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>

                                                                           First Nine Months
                                                                        ----------------------
                                                                            1998         1997 
<S>                                                                  <C>           <C>        
ROYALTIES:
Oil sales (Bbls)                                                         352,147       606,132
Gas sales (Mcf)                                                        1,213,613     1,977,266

PROPERTIES FROM WHICH THE ROYALTIES WERE CARVED:
Oil:
   Total oil sales (Bbls)                                              1,405,613     1,365,290
   Average per day (Bbls)                                                  5,149         5,001
   Average price per Bbl                                                  $13.23        $20.03
Gas:
   Total gas sales (Mcf)                                               5,425,012     5,457,970
   Average per day (Mcf)                                                  19,872        19,993
   Average price per Mcf                                                  $ 2.22        $ 2.69

</TABLE>

The average price of oil decreased during the nine months ended
September 30, 1998, compared to the same period in 1997, resulting in
an average price of $13.23 per barrel as compared to $20.03 per
barrel.  The decrease in the average price of oil is primarily due to
decreases in the posted price for oil.  The decrease in the average
price of gas from $2.69 per Mcf for the nine months ended
September 30, 1997 to $2.22 per Mcf for the nine months ended
September 30, 1998 is primarily the result of a decrease in the spot
prices of natural gas.

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. The oil and gas sales from the properties from which the
Royalties are carved were relatively unchanged for the applicable
period of 1998 compared to 1997.

The Trustee has been advised that 45 gross (17.495 net) productive oil
wells on the Waddell Ranch properties were drilled and completed
during the nine months ended September 30, 1998, and that 18 gross
(7.5 net) productive oil wells on the Waddell Ranch properties were
drilled and completed during the nine months ended September 30, 1997. 
Capital expenditures for the Waddell Ranch properties for the nine
months ended September 30, 1998 totaled $12 million compared to $9.0
million for the same period in 1997.  BROG has previously advised the
Trustee that the 1998 capital expenditures budget for the Waddell
Ranch properties is $17.6 million.

Lease operating expense and property taxes for the nine months ended
September 30, 1998, totaled $10.5 million compared to $9.9 million for
the same period in 1997.  This increase is primarily attributable to
the increase in accruals for the payment of property taxes by BROG.

                                 -12-

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, 1998 and 1997
respectively, was computed as shown in the table below:


<TABLE>
<CAPTION>
                                                      Three Months Ended September 30,
                                        -------------------------------------------------------------
                                                     1998                         1997
                                         ---------------------------- -----------------------------
                                            Waddell        Texas           Waddell        Texas
                                             Ranch        Royalty           Ranch        Royalty
                                          Properties    Properties       Properties    Properties

<S>                                      <C>             <C>           <C>            <C>       

Gross proceeds of sales from 
  properties from which the net
  overriding royalties were carved:

  Oil proceeds                           $4,404,427     $1,248,627      $ 6,428,085   $1,982,684
  Gas proceeds                            3,383,255        455,023        3,677,078      630,868
  Other revenues (a)                                     1,096,157 
                                         ----------      ---------        ---------    ---------
       Total                              7,787,682      2,799,807       10,105,163    2,613,552
                                         ----------      ---------        ---------    ---------
Less:
  Severance tax:
    Oil                                     133,024         45,800          260,743       78,645
    Gas                                     139,310         25,965          275,208       35,883
  Lease operating expense and
    property tax:
    Oil and gas                           3,679,622        195,124        2,735,186      192,030
  Capital expenditures                    4,519,057                       3,898,944
                                          ---------      ---------        ---------      -------
       Total                              8,471,013        266,889        7,170,081      306,558
                                          ---------      ---------        ---------      -------

Net profits                                (683,331)     2,532,918        2,935,082    2,306,994

Net overriding royalty interests                 75%            95%             75%          95%
                                          ---------       ---------        --------    ---------
                                           (512,498)      2,406,272       2,201,312    2,191,644

Less: excess cost over revenues (b)         512,498 
                                          ---------       ---------       ---------   ----------

Royalty income                             $  -0-       $ 2,406,272     $ 2,201,312   $2,191,644
                                         ==========      ==========      ==========   ==========

<FN>
(a)   The Trustee has been advised that in September 1998, Riverhill
      Energy received $1,096,157 representing amounts that had been
      previously held in suspense by BROG relating to the Texas Royalty
      properties.  The Trustee has been further advised that these
      amounts relate to revenues received by BROG prior to conveyance of
      its interest in the Texas Royalty properties to Riverhill Energy
      in February 1998.

(b)   In calculating Trust royalty income for the months of July through
      September 1998, costs exceeded revenues by $512,498 for the
      Waddell Ranch properties underlying the Waddell Ranch Net
      Overriding Royalty Conveyance, dated November 1, 1980.  Excess
      costs from one conveyance cannot reduce royalty income computed
      under another conveyance.  Therefore, cumulative excess costs plus
      accrued 

                                -13-

      interest must be recovered from future net proceeds of the
      underlying Waddell Ranch properties before these properties can
      again contribute to Trust royalty income.
</FN>
</TABLE>

ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.


                                 -14-


                     PART II - OTHER INFORMATION

Item 1.     Legal Proceedings

            As has been previously reported, the Trust was
            notified in the third quarter of 1996 of the
            settlement of a class action lawsuit pending in the
            270th District Court of Harris County, Texas (the
            "Court"), Cause No. 92-026182 styled Caroline Altheide
            and Langdon Harrison v. Meridian Oil Inc., Meridian
            Oil Holding Inc., Meridian Oil Trading Inc., Meridian
            Oil Production Inc., Southland Royalty Company, El
            Paso Production Company, Meridian Oil Hydrocarbons
            Inc., Meridian Oil Gathering Inc., Meridian Oil
            Services Inc., and Edward Parker ("Class Action"), in
            which the Trust is a class member. The judgment
            approving the settlement of the Class Action has been
            the subject of an appeal.  One of the conditions set
            forth in the settlement agreement relating to the
            Class Action relating to the distribution of the
            settlement proceeds is that there would be no
            distribution of settlement proceeds unless and until
            such judgment was no longer subject to further appeal
            and, if there was an appeal, not unless and until such
            judgment was affirmed or such appeal was dismissed and
            the time for any further proceedings in the appellate
            court of last resort had expired.  The Trustee has
            been advised that such appeal has been dismissed and
            it is the understanding of the Trustee that the
            conditions and restrictions that prevented payment of
            the settlement proceeds no longer exist.  The Trust
            has now received its portion of the settlement
            proceeds totalling $766,050.89.  Such settlement
            proceeds that have been received by the Trust will be
            distributed with the regular monthly Trust
            distribution on November 16, 1998 to the Trust's Unit
            holders of record on October 31, 1998.

Items 2 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 NationsBank,
                         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 NationsBank, 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 NationsBank, 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.

               (27)      Financial Data Schedule 

                                    -15-

             (b) Reports on Form 8-K

               During the quarter ended September 30, 1998, no reports on
               Form 8-K were filed by the Trust.


                                    -16-

                                 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.

                                   NATIONSBANK, N.A.
                                      TRUSTEE FOR THE
                                      PERMIAN BASIN ROYALTY TRUST




                                   By /s/ Eric F. Hyden
                                      --------------------------------
                                       Eric F. Hyden
                                       Vice President


Date:  November 13, 1998


             (The Trust has no directors or executive officers.)

                                   -17-

                            INDEX TO EXHIBITS

                                                               Sequentially
        Exhibit                                                  Numbered
        Number                    Exhibit                          Page

        (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 NationsBank, 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 NationsBank, 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
                  NationsBank, 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. *                     

        (27)      Financial Data Schedule **                


*       A copy of this Exhibit is available to any Unit holder, at the
        actual cost of reproduction, upon written request to the Trustee,
        NationsBank, N.A., P.O. Box 1317, Fort Worth, Texas 76101.

**      Filed herewith.