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FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from .............. to ...............
Commission file number 1-8581
FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 72-6108468
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
TEXAS COMMERCE BANK NATIONAL ASSOCIATION 77002
CORPORATE TRUST DIVISION (Zip Code)
712 MAIN STREET
HOUSTON, TEXAS
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code: (713) 216-5447
....................................
(Former name, former address and former fiscal year, if changed since last
report)
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
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FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I. Financial Information
Item 1. Financial Statements:
Statements of Royalty Proceeds and Distributable Cash........................... 3
Statements of Assets, Liabilities and Trust Corpus.............................. 3
Statements of Changes in Trust Corpus........................................... 3
Notes to Financial Statements................................................... 4
Report of Independent Public Accountants........................................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................ 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.......................................... 12
Signature............................................................................ 13
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST
STATEMENTS OF ROYALTY PROCEEDS AND DISTRIBUTABLE CASH
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ---------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Royalty proceeds...................... $ -- $ 4,790,500 $ -- $ 5,082,866
Trust administrative expenses......... (168,876) (125,291) (231,542) (186,408)
Interest income....................... 21,040 55,969 40,376 73,382
Reserve for future Trust expenses..... 147,836 (173,755) 191,166 (422,417)
----------- ----------- ----------- -----------
Distributable cash.................... $ -- $ 4,547,423 $ -- $ 4,547,423
=========== =========== =========== ===========
Distributable cash per Unit........... $ -- $ 0.30365 $ -- $ 0.30365
=========== =========== =========== ===========
Units outstanding..................... 14,975,390 14,975,390 14,975,390 14,975,390
=========== =========== =========== ===========
</TABLE>
STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and short-term investments............................... $ 2,109,813 $ 2,300,979
Net overriding royalty interest in oil and gas properties..... 189,875,741 189,875,741
Less, adjustment to recorded cost of net overriding royalty
interest in oil and gas properties.......................... (25,431,543) (25,431,543)
Less, accumulated amortization of net overriding royalty
interest.................................................... (164,260,985) (164,260,985)
------------- -------------
Total assets........................................ $ 2,293,026 $ 2,484,192
============= =============
LIABILITIES AND TRUST CORPUS
Reserve for future Trust expenses............................. $ 2,109,813 $ 2,300,979
Trust corpus (14,975,390 Units of Beneficial Interest
authorized,
issued and outstanding)..................................... 183,213 183,213
------------- -------------
Total liabilities and trust corpus.................. $ 2,293,026 $ 2,484,192
============= =============
</TABLE>
STATEMENTS OF CHANGES IN TRUST CORPUS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1996 1995
-------- -----------
<S> <C> <C>
Trust corpus, beginning of year..................................... $183,213 $ 212,918
Royalty proceeds and interest income, net of trust administrative
expenses and reserve for future Trust expenses.................... -- 4,547,423
Distributions payable to Unit holders............................... -- (4,547,423)
Amortization of net overriding royalty interest..................... -- (29,705)
-------- -----------
Trust corpus, end of period......................................... $183,213 $ 183,213
======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE> 4
FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST
NOTES TO FINANCIAL STATEMENTS
1. THE TRUST
Freeport-McMoRan Oil and Gas Royalty Trust (the Trust) was created
effective September 30, 1983. On that date, Freeport-McMoRan Inc. (FTX)
transferred a net overriding royalty interest in certain offshore oil and gas
properties to a Partnership (Partnership) equal to 90 percent of the Net
Proceeds (as defined in the Conveyance referred to below) from FTX's working
interests in such properties and conveyed a 99.9 percent general partnership
interest in the Partnership to the Trust. Such net overriding royalty interest
is referred to herein as the "Royalty". The Overriding Royalty Conveyance which
created the Royalty is referred to herein as the "Conveyance". The Trust is
passive, with Texas Commerce Bank National Association as Trustee. The Trustee
has only such powers as are necessary for the collection and distribution of
revenues attributable to the Royalty, the payment of Trust liabilities and the
protection of Trust assets.
The Trust Indenture provides generally that the Trust shall terminate upon
the first to occur of (i) the sale of all the Trust's interest in the
Partnership, or the sale by the Partnership of all the assets of the Partnership
including the Royalty, or (ii) a decision to terminate the Trust by the
affirmative vote of Unit holders representing a majority of the Units. The
Trustee is required to sell the Trust's interest in the Partnership, or cause
the Partnership to sell the Royalty, if the Trust's cash receipts for each of
three successive years are less than $3 million, thereby terminating the Trust
pursuant to (i) above. Upon the termination of the Trust under (ii) above, the
Trustee will sell the Trust's interest in the Partnership (or will cause the
Partnership to sell all of the assets of the Partnership). The Trustee will as
promptly as possible distribute the proceeds of any such sales according to the
respective interests and rights of the Unit holders after discharging all of the
liabilities of the Trust and, if necessary, setting up reserves in such amounts
as the Trustee in its discretion deems appropriate for contingent liabilities.
2. THE ROYALTY
Freeport-McMoRan Oil & Gas Company, a division of FTX (the Working Interest
Owner), presently owns the oil and gas interests burdened by the Royalty. The
Conveyance provides that the owner of the interests burdened by the Royalty will
calculate and pay monthly to the Partnership an amount equal to 90 percent of
the net proceeds for the preceding month. Net proceeds generally consist of the
excess of gross revenues received from the Royalty Properties (Gross Proceeds),
on a cash basis, over operating costs, capital expenditures and other charges,
on an accrual basis (Net Proceeds).
3. DISTRIBUTIONS TO UNIT HOLDERS
A cumulative excess Class A cost carry-forward of $2,904,455 existed as of
June 30, 1996. This carry-forward is subject to interest due the Working
Interest Owner at the prime rate, which totaled $90,429 net to the Trust during
the six-month period of 1996. The excess Class A cost carry-forward must be
recouped out of future Net Proceeds before distributions to the Unit holders can
be resumed.
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<PAGE> 5
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
4. GAS BALANCING ARRANGEMENTS
As a result of past curtailments in gas takes by the principal purchaser of
production from the Royalty Properties, certain quantities of gas have been sold
by other parties with interests in the Royalty Properties pursuant to gas
balancing arrangements. Proceeds from gas produced from the Royalty Properties
but sold by other parties pursuant to such balancing arrangements
(underproduction) are not included in Gross Proceeds for purposes of calculating
the Royalty. In the future, the Working Interest Owner will be entitled to sell
volumes equal to such underproduction or receive cash settlements. On certain of
the Royalty Properties, a cash settlement may be required, depending on future
results, because of the lack of sufficient remaining reserves from which to
makeup any underproduction. As of June 30, 1996, the unrecovered quantity of gas
sold by third parties pursuant to such gas balancing arrangements since
inception of the Trust through March 31, 1996 was approximately 1.7 billion
cubic feet (bcf), net to the Trust. Gross Proceeds will be increased in future
periods when the Working Interest Owner is compensated either through the sale
of gas or through cash settlements, the amount and timing of which is uncertain.
5. ESTABLISHMENT OF AN EXPENSE RESERVE
Because of the decline in Net Proceeds, at certain times since late 1993
the Trust has been unable to pay its ongoing administrative expenses. To permit
the Trust to pay its routine administrative expenses during the time the Trust
incurs a Class A cost deficit, the Trustee, in accordance with the Trust
Indenture, established an expense reserve of $2.4 million, of which $2,300,979
remained as of December 31, 1995. Because of the cumulative excess Class A cost
carry-forward (Note 3), $191,166 was withdrawn from the expense reserve to pay
Trust administrative expenses during the six-month period of 1996. There will be
income tax consequences to the Unit holders for such reserve as described in
Note 6 below.
The funding for this reserve is deposited with Texas Commerce Bank and
invested in Texas Commerce Bank collateralized certificates of deposit. The
average interest rate earned on these funds for the second quarter of 1996 was
3.8 percent.
6. FEDERAL INCOME TAX MATTERS
Unit holders are required to report taxable income for the Royalty income
received by the Trust and deposited to the expense reserve even if no
distributions were received by the Unit holders. The expense reserve established
for Trust administrative expenses described in Note 5 above will give rise to
future income tax deductions as additional administrative expenses are incurred
and paid with funds deposited in the reserve.
7. RESERVE FOR FUTURE ESTIMATED ABANDONMENT COSTS
Estimated future abandonment costs, based on current laws and regulations,
are accrued over the life of the Trust's properties. In July 1996, the Working
Interest Owner entered into a letter agreement to assign its interest in East
Cameron Block 336 to a co-owner effective August 1, 1996, free and clear of the
Royalty, subject to the conditions contained in the agreement. The Working
Interest Owner paid $0.2 million for
--5--
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
abandonment costs to the co-owner and upon completion of the proposed assignment
the co-owner will assume all abandonment obligations under the lease. The
completion of this assignment will result in a reduction of estimated future
abandonment costs totaling approximately $0.7 million, net to the Trust.
Subsequent to this assignment, the remaining aggregate abandonment costs to be
incurred for all of the Trust's properties will total $15.5 million net to the
Trust, of which $12.9 million has been withheld from distributions to Unit
holders as of June 30, 1996. These estimated future abandonment costs are by
their nature imprecise and can be expected to be revised over time due to
changes in general and specific cost levels, government regulations, operations
and technology. Any adjustments to estimated abandonment costs or variances to
actual costs will reduce or increase future distributable cash accordingly.
---------------------
THE INFORMATION FURNISHED HEREIN SHOULD BE READ IN CONJUNCTION WITH THE
FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST FINANCIAL STATEMENTS FOR THE YEAR
ENDED DECEMBER 31, 1995, WHICH ARE CONTAINED IN ITS ANNUAL REPORT ON FORM 10-K
FOR 1995.
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<PAGE> 7
FREEPORT-MCMORAN OIL AND GAS ROYALTY TRUST
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Texas Commerce Bank National Association (Trustee)
and the Unit Holders of Freeport-McMoRan Oil and Gas Royalty Trust:
We have reviewed the accompanying statement of assets, liabilities and
trust corpus of Freeport-McMoRan Oil and Gas Royalty Trust as of June 30, 1996,
the related statements of royalty proceeds and distributable cash for the three
and six month periods ended June 30, 1996 and 1995 and the related statements of
changes in trust corpus for the six month periods then ended. These financial
statements are the responsibility of the Working Interest Owner.
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 review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit 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.
These financial statements were prepared on the cash basis of accounting,
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 the financial statements referred to above for them to be in
conformity with the cash basis of accounting.
We have previously audited, in accordance with generally accepted auditing
standards, the statement of assets, liabilities and trust corpus of
Freeport-McMoRan Oil and Gas Royalty Trust as of December 31, 1995 and, in our
report dated February 28, 1996, we expressed an unqualified opinion on that
statement.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana,
July 30, 1996
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<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information contained herein regarding operations and exploration and
development activities on the properties burdened by the Royalty has been
furnished by the Working Interest Owner. For convenience, references are made to
the Notes to Financial Statements.
RESULTS OF OPERATIONS
There were no cash distributions to the Unit holders in the first six
months of 1996. Cash distributions to Unit holders in the second-quarter and
six-month periods of 1995 totaled $4.5 million or $0.30365 per Unit. The 1996
periods were impacted by lower gas and oil revenues and higher capital
expenditure levels, discussed below. Additionally, the 1995 periods benefited
from $4.8 million included in Gross Proceeds resulting from the settlement of
amounts owed the Mineral Management Service (MMS), discussed in Note 6 to the
1995 Annual Report. For the second quarter of 1996, Gross Proceeds exceeded
total costs by approximately $0.2 million, primarily because of lower
exploration and development costs, reducing the Class A cost carry-forward to
$2.9 million net to the Trust as of June 30, 1996 (Note 3). Because of this
Class A cost carry-forward, the Trust administrative expenses were paid from the
expense reserve during the second-quarter and six-month periods of 1996. The
calculation of distributable cash for each period follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- ---------------------------
1996 1995 1996 1995
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Gross Proceeds(1)....................... $1,090,451 $6,116,240 $ 1,932,045 $ 7,638,068
Total Costs(2).......................... (904,219) (788,134) (3,076,081) (1,449,333)
Excess Class A cost (recovery)
carry-forward, net(3)................. (186,232) -- 1,144,036 (535,453)
----------- ---------- ----------- -----------
Net Proceeds............................ -- 5,328,106 -- 5,653,282
Percentage attributable to Royalty...... 90.0% 90.0% 90.0% 90.0%
----------- ---------- ----------- -----------
Amounts payable attributable to
Royalty............................... -- 4,795,295 -- 5,087,954
Percentage attributable to the Trust.... 99.9% 99.9% 99.9% 99.9%
----------- ---------- ----------- -----------
Royalty Proceeds........................ -- 4,790,500 -- 5,082,866
Trust administrative expenses........... (168,876) (125,291) (231,542) (186,408)
----------- ---------- ----------- -----------
(168,876) 4,665,209 (231,542) 4,896,458
Interest income......................... 21,040 55,969 40,376 73,382
Reserve for future Trust expenses(4).... 147,836 (173,755) 191,166 (422,417)
----------- ---------- ----------- -----------
Distributable cash...................... $ -- $4,547,423 $ -- $ 4,547,423
=========== ========== =========== ===========
</TABLE>
- ---------------
(1) Gross Proceeds were calculated based on amounts received by the Working
Interest Owner during the three and six month periods ended in May of such
year.
(2) Total costs represent amounts accrued by the Working Interest Owner during
the three and six months periods ended in May of such year. Includes
accrued interest of $53,333 and $90,429 for the three and six month periods
of 1996, respectively.
(3) Recoveries represent Class A costs incurred in prior periods and recovered
in the current period; carry-forwards represent Class A costs incurred in
the applicable period that remained outstanding as of the end of such
period.
(4) Represents the amount withdrawn from (added to) the Trust administrative
expense reserve during the respective periods.
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<PAGE> 9
Gross Proceeds, which includes gas and oil revenues, are calculated based
on amounts received by the Working Interest Owner. Operating information for
each period follows:
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
------------------ ------------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Natural Gas
Revenues (in millions).................... $ 0.7 $ 1.0 $ 1.3 $ 2.0
Sales volumes (in billion cubic feet)..... .2 .5 .5 1.0
Average realization (per thousand cubic
feet).................................. $ 2.91 $ 1.97 $ 2.45 $ 2.02
Oil
Revenues (in millions).................... $ 0.4 $ 0.4 $ 0.6 $ 0.8
Sales volumes (in thousands of barrels)... 20.4 19.5 35.4 46.7
Average realization (per barrel).......... $18.36 $18.08 $17.36 $16.87
</TABLE>
Gas volumes decreased in the second-quarter and six-month periods of 1996
from 1995 levels because of the depletion of the Vermilion Block 310 and Eugene
Island Block 10 fields during 1995. Additionally, both gas and oil volumes for
the six-month 1996 period were negatively impacted by normal production
declines. Revenues for the 1996 periods benefited from an increase in average
realizations reflecting the rise in natural gas and oil market prices during
those periods.
Costs for each period consist of the following (in millions):
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
-------------- --------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Lease operating expenses............................ $0.6 $0.6 $1.4 $1.2
Exploration and development costs................... 0.2 -- 1.3 (0.2)
Estimated abandonment costs and other............... 0.1 0.2 0.4 0.4
---- ---- ---- ----
$0.9 $0.8 $3.1 $1.4
==== ==== ==== ====
</TABLE>
Lease operating costs were consistent between the periods. Second-quarter
and six-month 1996 exploration and development costs consisted of costs incurred
to explore and develop Vermilion Block 58, West Cameron Block 498, and Breton
Sound Block 55. Exploration and development costs for 1995 include a reversal of
previously accrued capital expenditures. Abandonment costs are accrued each
period based on the estimate of costs required to abandon the Trust's
properties.
CAPITAL RESOURCES AND LIQUIDITY
All revenues received by the Trust, net of Trust administrative expenses
and liabilities, are distributed to the Unit holders in accordance with
provisions of the Trust Indenture. As a result of the cumulative excess Class A
cost carry-forward of $2.9 million net to the Trust at June 30, 1996, the
additional development activities anticipated at West Cameron Block 498 and
Breton Sound Block 55 and the potential for exploratory drilling on other
Royalty Properties, the amount and timing of any future distributions to Unit
holders is presently indeterminable.
Drilling operations were completed on an exploratory well on Breton Sound
Block 55 during the second quarter of 1996. The well is currently scheduled for
completion and could commence production by as early as year-end 1996. The
Working Interest Owner owns an 18.75% working interest in Breton Sound Block 55
and a 9.375% working interest in this well pursuant to a codevelopment agreement
with the owner of the adjacent block. Costs and ownership of production
resulting from this activity will be retroactively adjusted based upon
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<PAGE> 10
the location of the reserves discovered following development of the area. The
Vermilion Block 58 No. 10 well reached its objective depth during 1996; and,
based on an evaluation of the results, the Working Interest Owner concluded that
it would not pursue any further development of this well.
Exploratory drilling on West Cameron Block 498 began in June 1994 and
resulted in four successful wells to date which have been saved for future
development. During 1996 there was a change in the operator of this property.
The current operator estimates that construction of the platform and production
facilities will begin during the second half of 1996, and that production will
commence in the first half of 1997.
Additional exploration may be proposed for certain other Royalty Properties
where geologic features have been identified. After analyzing each proposal, the
Working Interest Owner will determine whether or not to participate in
additional exploratory operations.
Total exploration and development costs for the remainder of 1996 are
budgeted by the Working Interest Owner at approximately $7.0 million net to the
Trust, including the development of West Cameron Block 498 and Breton Sound
Block 55. This budget is derived from cost estimates provided by the operators
of the Royalty Properties and may vary from actual costs depending on the
success of drilling, particular circumstances encountered during drilling and
many other factors outside the control of the operator. These expenditures can
be expected to reduce and could further delay resumption of distributions to
Unit holders.
Estimated future abandonment costs, based on current laws and regulations,
are accrued over the life of the Trust's properties (Note 7). In July 1996, the
Working Interest Owner entered into a letter agreement to assign its interest in
East Cameron Block 336 to a co-owner effective August 1, 1996, free and clear of
the Royalty, subject to the conditions contained in the agreement. The Working
Interest Owner paid $0.2 million for abandonment costs to the co-owner and upon
completion of the proposed assignment the co-owner will assume all abandonment
obligations under the lease. The completion of this assignment will result in a
reduction of estimated future abandonment costs totaling approximately $0.7
million, net to the Trust. Subsequent to this assignment, the remaining
aggregate abandonment costs to be incurred for all of the Trust's properties
will total $15.5 million net to the Trust, of which $12.9 million has been
withheld from distributions to Unit holders as of June 30, 1996. Based on these
amounts, future distributions to Unit holders would be reduced by approximately
$0.17 per Unit over the remaining productive lives of the properties, subject to
future revisions of such costs due to changes in general and specific cost
levels, government regulations, operations and technology.
At certain times since late 1993, the Trust has been unable to pay its
ongoing administrative expenses. To permit the Trust to pay its administrative
expenses during the time the Trust incurs a Class A cost deficit, the Trustee,
in accordance with the Trust Indenture, established a $2.4 million Trust
administrative expense reserve to pay such expenses (Note 5), of which $2.1
million remained at June 30, 1996.
The Trustee may sell or dispose of its interest in the Partnership, or
permit the Partnership to sell or dispose of all or any part of the Royalty,
only as authorized by a vote of holders of the Units, upon termination of the
Trust and in certain other limited circumstances. However, the Trustee is
directed to effect such a sale (without any such vote) if the Trust's cash
receipts for each of three successive years are less than $3 million. The
Trustee must distribute the net proceeds of such sale (after satisfaction of any
outstanding liabilities) to the Unit holders.
--10--
<PAGE> 11
[PRODUCTIVE PROPERTY MAP]
[The map shows the fields offshore Louisiana and Texas identifying the location
of the Trust's productive properties by block number, including gross and net
acreage and working interest percentage for each block, as of August 1,
1996.]
<TABLE>
<CAPTION>
Working
Property Interest%* Gross Acres Net Acres
-------- ---------- ----------- ---------
<S> <C> <C> <C>
Royalty Properties --
Offshore Louisiana:
Breton Sound Blk. 54/55 . . . . . . 18.75 6,946 1,302
Vermilion Blk. 21 . . . . . . . . . 4.17 4,139 172
Vermilion Blk. 22 . . . . . . . . . 4.17 5,000 208
Vermilion Blk. 58 . . . . . . . . . 22.50 5,000 1,125
West Cameron Blk. 65. . . . . . . . 4.17 5,000 208
West Cameron Blk. 215 . . . . . . . 31.28 5,000 1,564
West Cameron Blk. 498 . . . . . . . 23.08 5,000 1,154
West Delta Blk. 34 . . . . . . . . 30.00 2,500 750
Offshore Texas:
High Island Blk. A-552 . . . . . . 35.00 3,600 1,260
</TABLE>
* The Royalty Trust owns 99.9% of a 90% net profits interest in the Working
Interest for each block.
--11--
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Not applicable
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the registrant during the second
quarter of 1996.
--12--
<PAGE> 13
SIGNATURE
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.
<TABLE>
<S> <C>
FREEPORT-McMoRan OIL AND GAS
ROYALTY TRUST
By: Texas Commerce Bank National Association,
Trustee
By: /s/ PETE FOSTER
--------------------------------------------
PETE FOSTER
SENIOR VICE PRESIDENT AND TRUST OFFICER
</TABLE>
Date: August 13, 1996
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