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<SEC-DOCUMENT>0000950123-10-043378.txt : 20100504
<SEC-HEADER>0000950123-10-043378.hdr.sgml : 20100504
<ACCEPTANCE-DATETIME>20100504140531
ACCESSION NUMBER:		0000950123-10-043378
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20100331
FILED AS OF DATE:		20100504
DATE AS OF CHANGE:		20100504

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SABINE ROYALTY TRUST
		CENTRAL INDEX KEY:			0000710752
		STANDARD INDUSTRIAL CLASSIFICATION:	OIL ROYALTY TRADERS [6792]
		IRS NUMBER:				756297143
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08424
		FILM NUMBER:		10796415

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 830650
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75283-0650
		BUSINESS PHONE:		2145082400

	MAIL ADDRESS:	
		STREET 1:		PO BOX 830650
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75283-0650
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d72303e10vq.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vq</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>




<DIV style="font-family: 'Times New Roman',Times,serif">


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<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<P align="center" style="font-size: 18pt"><B>Form&nbsp;10-Q</B>


<P align="center" style="font-size: 12pt"><FONT face="Wingdings">&#120;</FONT> Quarterly Report Pursuant to Section&nbsp;13 or 15(d)<BR>
of the Securities Exchange Act of 1934

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<DIV align="center" style="font-size: 10pt">For the quarterly period
ended March 31, 2010</DIV>
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<P align="center" style="font-size: 10pt">OR


<P align="center" style="font-size: 12pt"><FONT face="Wingdings">&#111;</FONT> Transition Report Pursuant to Section&nbsp;13 or 15(d)<BR>
of the Securities Exchange Act of 1934

<DIV align="center" style="font-size: 10pt">For the transition period from <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV>


<P align="center" style="font-size: 10pt">Commission File Number: 1-8424

<P align="center" style="font-size: 24pt"><B>SABINE ROYALTY TRUST</B>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Texas
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">75-6297143</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">of incorporation or
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">organization</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">U.S. Trust, Bank of America<BR>
Private Wealth Management<BR>
Bank of America Plaza<BR>
901 Main Street<BR>
17th Floor<BR>
Dallas, Texas 75202<BR>
(Address of principal executive offices)<BR>
(Zip Code)


<P align="center" style="font-size: 10pt">(214)&nbsp;209-2400<BR>
(Registrant&#146;s telephone number, including area code)

<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required
to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12&nbsp;months (or for such shorter period that the registrant was
required to file such reports), and (2)&nbsp;has been subject to such filing
requirements for the past 90&nbsp;days. Yes <FONT face="Wingdings">&#120;</FONT> No <FONT face="Wingdings">&#111;</FONT>

<P align="left" style="font-size: 10pt">
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (&#167; 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes <FONT face="Wingdings">&#111;</FONT>   No <FONT face="Wingdings">&#111;</FONT>






<P align="left" style="font-size: 10pt">Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
&#147;large accelerated filer,&#148; &#147;accelerated filer&#148;
and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the Exchange Act.
(Check one): Large accelerated filer <FONT face="Wingdings">&#120;</FONT>
Accelerated filer <FONT face="Wingdings">&#111;</FONT>
Non-accelerated filer (Do not check if a smaller reporting company) <FONT face="Wingdings">&#111;</FONT> Smaller
reporting company <FONT face="Wingdings">&#111;</FONT>

<P align="left" style="font-size: 10pt">Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). Yes <FONT face="Wingdings">&#111;</FONT> No
<FONT face="Wingdings">&#120;</FONT>



<P align="left" style="font-size: 10pt">Number of units of beneficial
interest outstanding at May&nbsp;4, 2010:
14,579,345


<P>
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<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE  style="font-size: 10pt"  border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
        <TD width="3%"></TD>
        <TD width="3%"></TD>
        <TD width="3%"></TD>
        <TD width="3%"></TD>
        <TD width="3%"></TD>
        <TD width="3%"></TD>
        <TD width="3%"></TD>
        <TD width="3%"></TD>
        <TD width="76%"></TD>
        <TD width="3%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#101">PART I &#151; FINANCIAL INFORMATION</A></TD>
<TD></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#102">Item&nbsp;1. Financial Statements</A></TD>
<TD align="right">2</TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#103">Item&nbsp;2. Trustee&#146;s Discussion and Analysis of Financial Condition and Results of
Operations</A></TD>
<TD align="right">12</TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#104">Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk</A></TD>
<TD align="right">17</TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#105">Item&nbsp;4. Controls and Procedures</A></TD>
<TD align="right">17</TD></TR>
<TR><TD colspan="9"><A HREF="#106">PART II &#151; OTHER INFORMATION</A></TD>
<TD></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#107">Item&nbsp;1. Legal Proceedings</A></TD>
<TD align="right">18</TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#108">Item&nbsp;1A. Risk Factors</A></TD>
<TD align="right">18</TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#109">Item&nbsp;6. Exhibits</A></TD>
<TD align="right">18</TD></TR>
<TR><TD colspan="9"><A HREF="#110">SIGNATURES</A></TD>
<TD align="right">19</TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d72303exv31.htm">EX-31</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d72303exv32.htm">EX-32</A></FONT></TD></TR>
</TABLE>
</CENTER>







</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>SABINE ROYALTY TRUST</B>


<DIV align="left"><A NAME="101"></A></DIV>

<P align="center" style="font-size: 10pt">PART I &#151; FINANCIAL INFORMATION



<DIV align="left"><A NAME="102"></A></DIV>



<P align="left" style="font-size: 10pt"><I>Item&nbsp;1. Financial Statements.</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The condensed financial statements included herein have been prepared
by Bank of America, N.A. (as successor to NationsBank, N.A.), as Trustee (the
&#147;Trustee&#148;) of Sabine Royalty Trust (the &#147;Trust&#148;), 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. The condensed financial statements of the Trust
presented herein are unaudited. It is suggested that these
condensed financial statements and notes thereto be read in conjunction with the financial
statements and notes thereto included in the Trust&#146;s latest annual report on
Form 10-K. The December&nbsp;31, 2009 condensed balance sheet is derived from the audited
balance sheet as of that date. In the opinion of the Trustee, all adjustments
necessary to present fairly the assets, liabilities and trust corpus of the
Trust as of March 31, 2010, the distributable income for the
three-month periods ended March 31, 2010 and 2009 and the changes in trust
corpus for the three-month periods ended March 31, 2010 and 2009, have been
included. The distributable income for such interim periods is not necessarily
indicative of the distributable income for the full year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
condensed financial statements as of March 31, 2010 and for the
three-month periods ended March 31, 2010 and 2009, included
herein, have been reviewed by Deloitte &#038; Touche LLP, an independent registered
public accounting firm, as stated in their report appearing herein.

<DIV align="left">
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</DIV>


<P align="center" style="font-size: 10pt">2
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Unit Holders of Sabine Royalty Trust and<BR>
Bank of America, N.A., Trustee<BR>
Dallas, Texas

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have reviewed the accompanying condensed statement of assets, liabilities and trust corpus of
Sabine Royalty Trust (the &#147;Trust&#148;) as of March 31, 2010, and the related condensed statements of
distributable income for the three-month periods ended
March 31, 2010 and 2009 and changes  in trust corpus for the
three-month periods ended March 31, 2010 and 2009. These interim
financial statements are the responsibility of the Trustee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We conducted our reviews in accordance with the standards of the Public Company Accounting
Oversight Board (United States). A review of interim financial information consists principally of
applying analytical procedures and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in accordance with
the standards of the Public Company Accounting Oversight Board (United States), 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As described in Note 2 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on our reviews, we are not aware of any material modifications that should be made to such
condensed interim financial statements for them to be in conformity with the basis of accounting
described in Note 2.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have previously audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the statement of assets, liabilities, and trust corpus of Sabine
Royalty Trust as of December&nbsp;31, 2009, 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 1, 2010, 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&nbsp;31, 2009 is fairly stated, in all material respects, in relation to
the statement of assets, liabilities, and trust corpus from which it has been derived.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">/s/ DELOITTE &#038; TOUCHE LLP
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Austin,
TX</DIV>

<DIV align="left" style="font-size:10pt; margin-top: 6pt">May&nbsp;4, 2010
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



<P align="center" style="font-size: 10pt">3


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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>SABINE ROYALTY TRUST</B>

<!-- xbrl,bs -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">CONDENSED STATEMENTS OF ASSETS, LIABILITIES, AND TRUST CORPUS (UNAUDITED)
</DIV>
<!-- xbrl,body -->
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>March 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">December 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Note</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2010</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and short-term investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>7,431,809</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,873,961</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Royalty interests in oil and gas properties
(less accumulated amortization of $21,768,608
and $21,745,488 at March&nbsp;31, 2010 and
December&nbsp;31, 2009)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>626,577</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">649,697</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>TOTAL</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>8,058,386</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,523,658</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Liabilities and Trust Corpus</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trust expenses payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>198,433</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">147,048</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other payables</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>286,399</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">180,093</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>484,832</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">327,141</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trust corpus &#151; 14,579,345 units of beneficial
interest authorized and outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>7,573,554</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,196,517</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px"><B>TOTAL</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>8,058,386</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,523,658</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<!-- /xbrl,bs -->



<P align="left" style="font-size: 10pt">The accompanying notes are an integral part of these condensed financial
statements.

<P align="center" style="font-size: 10pt">4
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt"><b>SABINE ROYALITY TRUST</b>

<!-- xbrl,in -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME (UNAUDITED)
</DIV>
<!-- xbrl,body -->

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">Three Months Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Notes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2010</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Royalty Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>14,375,593</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,876,919</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>287</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,155</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>14,375,880</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,896,074</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">General and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(567,676</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(619,558</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributable Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>13,808,204</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,276,516</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD>&nbsp;</TD><TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributable Income per unit
(14,579,345 units)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,3,5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>.95</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">.70</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<!-- /xbrl,in -->


<P align="left" style="font-size: 10pt">The accompanying notes are an integral part of these condensed financial
statements.


<P align="center" style="font-size: 10pt">5
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<P align="left" style="font-size: 10pt"><b>SABINE ROYALITY TRUST</b>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS (UNAUDITED)

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">Three Months Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Note</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2010</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trust corpus, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>5,196,517</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,735,265</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization of royalty interests</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(23,120</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22,272</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributable income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>13,808,204</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,276,516</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>(11,408,047</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12,858,382</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trust corpus, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>7,573,554</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,131,127</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD><TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributions per unit (14,579,345 units)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>.78</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">.88</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P align="left" style="font-size: 10pt">The accompanying notes are an integral part of these condensed financial
statements.


<P align="center" style="font-size: 10pt">6
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- xbrl,ns -->

<P align="left" style="font-size: 10pt"><B>SABINE ROYALTY TRUST</B>


<P align="left" style="font-size: 10pt"><B>NOTES TO CONDENSED
FINANCIAL STATEMENTS (UNAUDITED)</B>

<!-- xbrl,n -->
<P align="left" style="font-size: 10pt"><B>1. TRUST ORGANIZATION AND
PROVISIONS</B>

<!-- xbrl,body -->

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sabine Royalty Trust (the &#147;Trust&#148;) was established by the Sabine
Corporation Royalty Trust Agreement (the &#147;Trust Agreement&#148;), made and entered
into effective as of December&nbsp;31, 1982, to receive a distribution from Sabine
Corporation (&#147;Sabine&#148;) of royalty and mineral interests, including landowner&#146;s
royalties, overriding royalty interests, minerals (other than executive rights,
bonuses and delay rentals), production payments and any other similar,
nonparticipatory interests, in certain producing and proved undeveloped oil and
gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma
and Texas (the &#147;Royalties&#148;).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certificates evidencing units of beneficial interest (the &#147;Units&#148;) in the
Trust were mailed on December&nbsp;31, 1982 to Sabine&#146;s shareholders of record on
December&nbsp;23, 1982, on the basis of one Unit for each share of Sabine&#146;s
outstanding common stock. In May&nbsp;1988, Sabine was acquired by Pacific
Enterprises (&#147;Pacific&#148;), a California corporation. Through a series of mergers,
Sabine was merged into Pacific Enterprises Oil Company (USA) (&#147;Pacific (USA)&#148;),
a California corporation and a wholly owned subsidiary of Pacific, effective
January&nbsp;1, 1990. This acquisition and the subsequent mergers had no effect on
the Units. Pacific (USA), as successor to Sabine, has assumed by operation of
law all of Sabine&#146;s rights and obligations with respect to the Trust. The Units
are listed and traded on the New York Stock Exchange.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the transfer of the Royalties to the Trust upon its
formation, Sabine had reserved to itself all executive rights, including rights
to execute leases and to receive bonuses and delay rentals. In January&nbsp;1993,
Pacific (USA)&nbsp;completed the sale of substantially all its producing oil and gas
assets to a third party. The sale did not include executive rights relating to
the Royalties, and Pacific (USA)&#146;s ownership of such rights was not affected by
the sale.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank of America, N.A.
(the &#147;Trustee&#148;), acts as trustee of the Trust. In 2007 the
Bank of America private wealth management group officially became
known as &#147;U.S. Trust, Bank of America Private Wealth
Management.&#148; The legal entity that serves as the Trustee of the
Trust did not change, and references in this Form 10-Q to U.S. Trust,
Bank of America Private Wealth Management shall describe the legal
entity Bank of America, N.A. The terms of the Trust Agreement provide, among other things, that:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trust shall not engage in any business or commercial activity of any kind
or acquire assets other than those initially transferred to the Trust.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee may not sell all or any part of its assets unless approved by the
holders of a majority of the outstanding Units in which case the sale must be
for cash and the proceeds, after satisfying all existing liabilities,
promptly distributed to Unit holders.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee may establish a cash reserve for the payment of any liability
that is contingent or uncertain in amount or that otherwise is not currently
due or payable.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee will use reasonable efforts to cause the Trust and the Unit
holders to recognize income and expenses on monthly record dates.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee is authorized to borrow funds to pay liabilities of the Trust
provided that such borrowings are repaid in full before any further
distributions are made to Unit holders.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Trustee will make monthly cash distributions to Unit holders of record on
the monthly record date (see Note 3).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">7</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of the passive nature of the Trust and the restrictions and
limitations on the powers and activities of the Trustee contained in the Trust
Agreement, the Trustee does not consider any of the officers and employees of
the Trustee to be &#147;officers&#148; or &#147;executive officers&#148; of the Trust as such terms
are defined under applicable rules and regulations adopted under the Securities
Exchange Act of 1934.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proceeds of production from the Royalties are receivable from hundreds
of separate payors. In order to facilitate creation of the Trust and to avoid
the administrative expense and inconvenience of daily reporting to Unit holders,
the conveyances by Sabine of the Royalties located in five of the six states
provided for the execution of an escrow agreement by Sabine and the initial
trustee of the Trust, in its capacities as trustee of the Trust and as escrow
agent. The conveyances by Sabine of the Royalties located in Louisiana provided
for the execution of a substantially identical escrow agreement by Sabine and a
Louisiana bank in the capacities of escrow agent and of trustee under the name
of Sabine Louisiana Royalty Trust. Sabine Louisiana Royalty Trust, the sole
beneficiary of which is the Trust, was established in order to avoid uncertainty
under Louisiana law as to the legality of the Trustee&#146;s holding record title to
the Royalties located in Louisiana. The Trust now only has one escrow
agent, which is the Trustee, and a single escrow agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the terms of the escrow agreement and the conveyances of the
properties by Sabine, the proceeds of production from the Royalties for each
calendar month, and interest thereon, are collected by the Trustee,
as escrow agent, and are
paid to and received by the Trust only on the next monthly record
date. The Trustee, as
escrow agent, has agreed to endeavor to assure that it incurs and pays expenses
and fees for each calendar month only on the next monthly record date. The Trust
Agreement also provides that the Trustee is to endeavor to assure that income of
the Trust will be accrued and received and expenses of the Trust will be
incurred and paid only on each monthly record date. Assuming that the escrow
agreement is recognized for Federal income tax purposes and that the
Trustee is able to control the timing of income and expenses, as
stated above, cash and accrual basis Unit holders should be treated as realizing
income only on each monthly record date. The Trustee is treating the escrow
agreement as effective for tax purposes. However, for financial reporting
purposes, royalty and interest income are recorded in the calendar month in
which the amounts are received by either the escrow agent or the Trust.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributable income as determined for financial reporting purposes for a
given quarter will not usually equal the sum of distributions made during that
quarter. Distributable income for a given quarter will approximate the sum of
the distributions made during the last two months of such quarter and the first
month of the next quarter.


<P align="center" style="font-size: 10pt">8</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">

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<P align="left" style="font-size: 10pt"><B>2. ACCOUNTING POLICIES</B>


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Accounting


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of the Trust are prepared on the following basis
and are not intended to present financial position and results of operations in
conformity with accounting principles generally accepted in the United States of
America (&#147;GAAP&#148;):


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalty income, net of severance and ad valorem tax, and interest income are
recognized in the month in which amounts are received by the Trust (see Note
1).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Trust expenses, consisting principally of routine general and administrative
costs, include payments made during the accounting period. Expenses are
accrued to the extent of amounts that become payable on the next monthly
record date following the end of an accounting period. Reserves for
liabilities that are contingent or uncertain in amount may also be
established if considered necessary.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalties that are producing properties are amortized using
the unit-of-production method. This amortization is shown as a
reduction of Trust corpus.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Distributions to Unit holders are recognized when declared by the Trustee
(see Note 3).</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of the Trust differ from financial statements
prepared in conformity with accounting principles generally accepted in the
United States of America because of the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalty income is recognized in the month received rather than in the month
of production.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Expenses other than those expected to be paid on the following monthly record
date are not accrued.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amortization of the Royalties is shown as a reduction to Trust corpus and not
as a charge to operating results.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reserves may be established for contingencies that would not be recorded
under accounting principles generally accepted in the United States of
America.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This comprehensive basis of accounting other than GAAP corresponds to the
accounting permitted for royalty trusts by the U.S. Securities and Exchange
Commission, as specified by Staff Accounting Bulletin Topic 12:E, <i>Financial
Statements of Royalty Trusts</i>.

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of Estimates


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in conformity with the basis of
accounting described above requires the Trustee to make estimates and assumptions
that affect reported amounts of certain assets, liabilities, revenues and
expenses as of and for the reporting periods. Actual results may differ from
such estimates.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee routinely reviews the Trust&#146;s royalty interests in oil and gas
properties for impairment whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable. If an impairment event
occurs and it is determined that the carrying value of the Trust&#146;s royalty
interests may not be recoverable, an impairment will be recognized as measured
by the amount by which the carrying amount of the royalty interests exceeds the
fair value of these assets, which would likely be measured by discounting
projected cash flows. As of March 31, 2010, no impairment is
required.

<P align="center" style="font-size: 10pt">9</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New
Accounting Standards






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2009, the FASB issued guidance which changes how a company determines when an entity
that is insufficiently capitalized or is not controlled through voting (or similar rights) should
be consolidated. The determination of whether a company is required to consolidate an entity is
based on, among other things, an entity&#146;s purpose and design and a company&#146;s ability to direct the
activities of the entity that most significantly impact the entity&#146;s economic performance. This
guidance was effective for the Trust on January&nbsp;1, 2010, and the adoption did not have an impact on
the Trust&#146;s financial statements.
</DIV>





<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributable Income per Unit


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic distributable income per Unit is computed by dividing distributable income by the weighted
average Units outstanding. Distributable income per Unit assuming dilution is computed by
dividing distributable income by the weighted average number of Units and equivalent
Units outstanding. The Trust had no equivalent Units outstanding for any period
presented. Therefore, basic distributable income per Unit and
distributable income per Unit assuming dilution are the same.
</div>

<P align="center" style="font-size: 10pt">10
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<DIV style="font-family: 'Times New Roman',Times,serif">

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
Tax Considerations


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Internal Revenue Service has ruled that the Trust is classified as a
grantor trust for Federal income tax purposes and therefore is not subject to
taxation at the trust level. The Unit holders are considered, for Federal income
tax purposes, to own the Trust&#146;s income and principal as though no trust were in
existence. Accordingly, no provision for Federal income tax expense has been
made in these financial statements. The income of the Trust will be deemed to
have been received or accrued by each Unit holder at the time such income is
received or accrued by the Trust (on the applicable monthly record
date) if the escrow arrangement discussed in Note 1
to these financial statements is respected by the Internal Revenue Service. In
the absence of the escrow arrangement, Unit holders would be deemed to receive
or accrue income from production from the royalty properties (and interest
income) on a daily basis, in accordance with their method of accounting, as the
proceeds from production and interest thereon were received or accrued by the
Trust. The Trustee is treating the escrow arrangement as effective for tax
purposes and furnishes tax information to Unit holders on that basis.

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some Trust Units are held by  middlemen, as such term is broadly defined
in U.S. Treasury Regulations (and includes custodians, nominees, certain joint owners,
and brokers holding an interest for a custodian in street name, referred to herein collectively as &#147;middlemen&#148;).  Therefore, the Trustee
considers the Trust to be a non-mortgage  widely held fixed investment trust
(&#147;WHFIT&#148;) for U.S. Federal income tax purposes. U.S. Trust,
Bank of America Private Wealth Management, EIN: 56-0906609, 901 Main Street, 17th Floor, Dallas, Texas, 75202, telephone number (214) 209-2400, is
the representative of the Trust that will provide tax information



in accordance with
applicable U.S. Treasury Regulations governing the information reporting requirements
of the Trust as a WHFIT. Tax information is also posted by the Trustee at <u>www.sbr-sabineroyalty.com</U>. Notwithstanding the
foregoing, the middlemen holding Trust Units on behalf of Unit holders, and not the Trustee of the
Trust, are solely responsible for complying with the information
reporting requirements under the U.S.
Treasury Regulations with respect to such Trust Units, including the issuance of IRS Forms 1099 and
certain written tax statements. Unit holders whose Trust Units are held by middlemen should
consult with such middlemen regarding the information that will be reported to them by the
middlemen with respect to the Trust Units.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Unit holder should consult his tax advisor regarding Trust tax
compliance matters.


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State Tax Considerations
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust holds properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma
and Texas. Unit holders should consult the Trust&#146;s latest annual report on Form 10-K for a summary
of state tax matters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unit holders should be advised that New Mexico imposes a withholding tax on payments of oil
and gas proceeds derived from royalty interests. To reduce the administrative burden imposed by
these rules, the Trustee has opted to allow the payors of oil and gas proceeds to withhold on
royalty payments made to the Trust. The Trust will then file a New Mexico tax return, obtain a
refund, and distribute that refund to Unit holders. Unit holders who transfer their Units before
the New Mexico tax refund is received by the Trust or after the refund is received but before the
next Monthly Record Date will not receive any portion of the refund. As a result, such Unit
holders may incur a double tax &#151; first through the reduced
distribution received from the Trust as
withholding at the Trust level reduces the amount of cash available for distribution and second by
the tax payment made directly to New Mexico with the filing of their New Mexico income tax returns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Texas imposes a margin tax at a rate of 1% on gross revenues less certain deductions, as specifically set forth in the Texas margin tax statute.
Entities subject to tax generally include
trusts unless otherwise exempt, and most other types of entities
having limited liability protection.
Trusts that meet certain statutory requirements
are generally exempt from the margin tax as &#147;passive
entities.&#148; The Trust should be exempt from Texas margin tax as a &#147;passive entity.&#148;
  Since the Trust is exempt from the margin tax at the Trust level as a passive entity, each Unit holder
that is a business entity subject to the Texas margin tax would generally include its share of the Trust&#146;s revenue in its own Texas margin
tax computation. The source of such income to a Unit holder would be
Texas since the Trust&#146;s day-to-day operations are conducted in
Texas.</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Unit holder is urged to consult his own tax advisor regarding the
requirements for filing state tax returns.
</DIV>

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<P align="left" style="font-size: 10pt"><B>3. DISTRIBUTION TO UNIT
HOLDERS</B>

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount to be distributed to Unit holders (&#147;Monthly Income Amount&#148;) is
determined on a monthly basis. The Monthly Income Amount is an amount equal to
the sum of cash received by the Trust during a monthly period (the period
commencing on the day after a monthly record date and continuing through and
including the next succeeding monthly record date) attributable to the
Royalties, any reduction in cash reserves and any other cash receipts of the
Trust, including interest, reduced by the sum of liabilities paid and any
increase in cash reserves. Unit holders of record as of the monthly record date
(the 15th day of each calendar month except in limited circumstances) are
entitled to have distributed to them the calculated Monthly Income Amount for
such month on or before 10 business days after the monthly record date. The
Monthly Income Amount per Unit is declared by the Trust no later than 10&nbsp;days
prior to the monthly record date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The cash received by the Trust from purchasers of the Trust&#146;s oil and gas
production consists of gross sales of production less applicable severance
taxes.


<P align="center" style="font-size: 10pt">11</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">

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<P align="left" style="font-size: 10pt"><B>4. PAYABLES</B>
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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables consist primarily of royalty receipts suspended pending
verification of ownership interest or title.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee believes that these other payables represent an ordinary
operating condition of the Trust and that such payables will be paid or released
in the normal course of business.

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<P align="left" style="font-size: 10pt"><B>5. SUBSEQUENT EVENTS</B>
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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
to March 31, 2010, the Trust declared the following
distributions:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Monthly</B></TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD align="center"><B>Notification</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Record</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Payment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Distribution</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
<TD nowrap align="center"><B>Date</B><HR size="1" noshade></TD>
<TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
<TD nowrap align="center" colspan="1"><B>Date</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>per Unit</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV align="left" style="margin-left:10px; text-indent:-10px">April 5</DIV></TD>
    <TD>&nbsp;</TD>
    <TD><DIV align="center" style="margin-left:10px; text-indent:-10px">April 15</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center">April 29</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">.47982</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
events have been evaluated through the date of issuance of the
condensed financial statements.

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<P align="left" style="font-size: 10pt"><B>6. CONTINGENCIES</B>
<!-- xbrl,body -->


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingencies related to the royalty 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 Unit holders. The Trustee is not aware of any such
items as of March 31, 2010.

<DIV align="left"><A NAME="103"></A></DIV>
<P align="left" style="font-size: 10pt"><I>Item&nbsp;2.
Trustee&#146;s Discussion and Analysis of Financial Condition and
Results of Operations.</I>



<P align="left" style="font-size: 10pt"><B>Liquidity and Capital
Resources</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust makes monthly distributions to the holders of Units of the excess
of the preceding month&#146;s revenues received over expenses incurred. Upon receipt,
royalty income is invested in short-term investments until its subsequent
distribution. In accordance with the Trust Agreement, the Trust&#146;s only long-term
assets consist of royalty interests in producing and proved undeveloped oil and
gas properties. Although the Trust is permitted to borrow funds if necessary to
continue its operations, borrowings are not anticipated in the foreseeable
future.


<P align="left" style="font-size: 10pt"><B>Results of Operations</B>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributable income
consists of royalty income plus interest income plus
any decrease in cash reserves established by the Trustee less general and
administrative expenses of the Trust less any increase in cash reserves
established by the Trustee.  Distributable income for the three months
ended March 31, 2010 was $13,808,204, or $0.95 per unit.  Royalty income for the
three months ended March 31, 2010 amounted to $14,375,593 while interest income
was $287.  General and administrative expenses totaled $567,676 for the
three months ended March 31, 2010.
</DIV>





<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions
during the period were $.31518, $.28526, and $.18204 per Unit
payable to Unit holders of record on January&nbsp;15, February 16, and
March&nbsp;15, 2010,
respectively.</DIV>

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<P align="center" style="font-size: 10pt">12</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Royalty income for the quarter
ended March 31, 2010 increased approximately $3,499,000 or 32%
compared with the first quarter of 2009.  This increase was caused by increases in the production of both oil
and natural gas as well as an increase in the price of oil.  These increases were offset somewhat by a decrease in the price of natural gas. Compared to the preceding quarter ended December 31,  2009, royalty
income increased approximately $4,638,000, or 48%, due to increases in the production of both oil and natural
gas along with increases in the pricing of both natural gas and oil.

</DIV>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following tables illustrate average prices received for the periods
discussed above and the related oil and gas production volumes:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000">Quarter Ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">March 31,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">March 31,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">December 31,</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">2010</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">2009</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Production</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Oil (Bbls)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">109,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106,132</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gas (Mcfs)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,635,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,572,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,489,625</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average Price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Oil (per Bbl)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">39.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">66.81</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gas (per Mcf)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.57</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gas revenues received
for the three months ended March 31, 2010, related primarily to production for October 2009
through December 2009.  The average price of gas as reported by the Henry Hub for the same time period was
$4.42 per Mcf.  The average price of gas for the Henry Hub was $4.52 per Mcf for January 2010 through March 2010.
Oil revenues for the three months ended March 31, 2010 related primarily to production for November 2009 through
January 2010.  The average price of oil as reported by Nymex for that time period was $77.02 per barrel.  The average
price of oil as reported by Nymex was $78.82 per barrel for January 2010 through March 2010.  As of April 16, 2010, the average price of
gas for the Henry Hub was $3.59 per Mcf and the average price of oil reported by Nymex was $85.51 per barrel.
It is difficult to accurately estimate future prices of oil and gas, and any assumptions concerning future
prices may prove to be incorrect.

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income
for the quarter ended March 31, 2010 decreased approximately $18,900
compared with the first quarter of 2009.  Compared to the preceding quarter ended
December 31, 2009, interest income decreased approximately $40.  Changes in interest
income are the result of changes in interest rates and funds available for investment.

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and
administrative expenses for the quarter ended March 31, 2010 decreased by approximately $51,900
compared to the same quarter of 2009 primarily due to decreases in  transfer agent fees of approximately $12,400 along
decreases in the timing of professional service fees, auditing fees, and printing costs of approximately $10,400, $34,500,
and $20,200, respectively.  These decreases were offset somewhat by increases in unitholder information services and
the timing of accounting support fees for the FASB and PCAOB of approximately $13,100 and $8,800, respectively.
Compared to the previous quarter ended December 31, 2009, general and administrative expenses increased approximately $66,200.  This increase was primarily due to the timing of annual payments in the first quarter such as
expenses related to the printing and mailing of annual tax information, the annual accounting support fees for the FASB
and PCAOB and the New York Stock Exchange listing fee of $46,800, $8,800, and $38,000, respectively along with increases
in legal services of $6,700.  These increases were somewhat offset by
decreases in ad valorem rendition service fees,
and the timing of auditing fees of approximately $24,000 and $6,500, respectively.
</DIV>

<P align="center" style="font-size: 10pt">13</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">Critical Accounting Policies and Estimates



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust&#146;s financial statements reflect the selection and application of
accounting policies that require the Trust to make significant estimates and
assumptions. The following are some of the more critical judgement areas in the
application of accounting policies that currently affect the Trust&#146;s financial
condition and results of operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Accounting


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of the Trust are prepared on the following basis
and are not intended to present financial position and results of operations in
conformity with accounting principles generally accepted in the United States
of America:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalty income, net of severance and ad valorem taxes, and interest
income are recognized in the month in which amounts are received by
the Trust.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Trust expenses, consisting principally of routine general and
administrative costs, include payments made during the accounting
period. Expenses are accrued to the extent of amounts that become
payable on the next monthly record date following the end of the
accounting period. Reserves for liabilities that are contingent or
uncertain in amount may also be established if considered necessary.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalties that are producing properties are amortized using the
unit-of-production method. This amortization is shown as a reduction
of Trust corpus.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Distributions to Unit holders are recognized when declared by the
Trustee.</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt">14</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements of the Trust differ from financial statements
prepared in conformity with accounting principles generally accepted in the
United States of America because of the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Royalty income is recognized in the month received rather than in the
month of production.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Expenses other than those expected to be paid on the following
monthly record date are not accrued.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amortization of the Royalties is shown as a reduction to Trust corpus
and not as a charge to operating results.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reserves may be established for contingencies that would not be
recorded under accounting principles generally accepted in the United
States of America.</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This comprehensive basis of accounting other than GAAP corresponds to the
accounting permitted for royalty trusts by the U.S. Securities and Exchange
Commission, as specified by Staff Accounting Bulletin Topic 12:E, <I>Financial
Statements of Royalty Trusts</I>.

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 for the twelve-month period ended September
30th in that calendar year and from oil produced for the twelve-month period ended October 31st in the same calendar year.

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reserve Disclosure

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC and the Financial Accounting Standards Board requires supplemental disclosures for oil and
gas producers based on a standardized measure of discounted future net cash flows relating to
proved oil and gas reserve quantities. Under this disclosure, future cash inflows are computed by
applying the average prices during the 12-month period prior to the fiscal year-end, determined as
an unweighted arithmetic average of the first-day-of-the-month price for each month within such
period, unless prices are defined by contractual arrangements, excluding escalations based upon
future conditions. Future price changes are only considered to the extent provided by contractual
arrangements in existence at year end. The standardized measure of discounted future net cash
flows is achieved by using a discount rate of 10% a year to reflect the timing of future cash flows
relating to proved oil and gas reserves. 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 nonproducing reserves. Such reserve estimates are subject to change as additional
information becomes available. The reserves actually recovered and the timing of production may be
substantially different from the reserve estimates. Other than those filed with the SEC, our
estimated reserves have not been filed with or included in any reports to any federal agency.
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingencies


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingencies related to the royalty 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 Unit holders. The Trustee is not aware of any such
items as of March 31, 2010.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of Estimates


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in conformity with the basis of
accounting described above requires management to make estimates and assumptions
that affect reported amounts of certain assets, liabilities, revenues and
expenses as of and for the reporting periods. Actual results may differ from
such estimates.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee routinely reviews the Trust&#146;s royalty interests in oil and gas
properties for impairment whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable. If an impairment event
occurs and it is determined that the carrying value of the Trust&#146;s royalty
interests may not be recoverable, an impairment will be recognized as measured
by the amount by which the carrying amount of the royalty interests exceeds the
fair value of these assets, which would likely be measured by discounting
projected cash flows.


<P align="center" style="font-size: 10pt">15</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New Accounting Standards
</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2009, the FASB issued guidance which changes how a company determines when an entity
that is insufficiently capitalized or is not controlled through voting (or similar rights) should
be consolidated. The determination of whether a company is required to consolidate an entity is
based on, among other things, an entity&#146;s purpose and design and a company&#146;s ability to direct the
activities of the entity that most significantly impact the entity&#146;s economic performance. This
guidance was effective for the Trust on January&nbsp;1, 2010, and the adoption did not have an impact on
the Trust&#146;s financial statements.
</DIV>



<P align="center" style="font-size: 10pt">16</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt; margin-top:12pt"><B>Other</B>

<P align="left" style="font-size: 10pt; margin-top:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward Looking Statements

<P align="left" style="font-size: 10pt; margin-top:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Report includes &#147;forward-looking statements&#148; within the meaning of
Section&nbsp;21E of the Securities Exchange Act of 1934, which are intended to be
covered by the safe harbor created thereby. All statements other than statements
of historical fact included in this Report are forward-looking statements.
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&#146;s
control, that may cause such expectations not to be realized, including, among
other things, factors identified in the Trust&#146;s most recent Annual Report on
Form 10-K affecting oil and gas prices and the recoverability of reserves,
general economic conditions, actions and policies of petroleum-producing nations
and other changes in the domestic and international energy markets.




<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust has an Internet website and has made available its annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d)
of the Exchange Act at http://www.sbr-sabineroyalty.com as soon as reasonably
practicable after such information is electronically filed with or furnished to
the SEC.


<DIV align="left"><A NAME="104"></A></DIV>
<P align="left" style="font-size: 10pt"><I>Item&nbsp;3. Quantitative
and Qualitative Disclosures About Market Risk.</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trust invests in no derivative financial instruments, and has no
foreign operations or long-term debt instruments. Other than the Trust&#146;s ability
to periodically borrow money as necessary to pay expenses, liabilities and
obligations of the Trust that cannot be paid out of cash held by the Trust, the
Trust is prohibited from engaging in borrowing transactions. The amount of any
such borrowings is unlikely to be material to the Trust. The Trust periodically
holds short-term investments acquired with funds held by the Trust pending
distribution to Unit holders and funds held in reserve for the payment of Trust
expenses and liabilities. Because of the short-term nature of these borrowings
and investments and certain limitations upon the types of such investments which
may be held by the Trust, the Trustee believes that the Trust is not subject to
any material interest rate risk. Currently, such funds are invested in Bank of America certificates of deposit which are backed by
the good faith and credit of Bank of America, N.A., but are only insured by the Federal Deposit
Insurance Corporation up to $250,000. Each Unit holder should independently assess the
creditworthiness of Bank of America, N.A. For more information about the credit rating of Bank of
America, N.A., please refer to its periodic filings with the SEC. The Trust does not engage in transactions in
foreign currencies which could expose the Trust or Unit holders to any foreign
currency related market risk.



<DIV align="left"><A NAME="105"></A></DIV>
<P align="left" style="font-size: 10pt"><I>Item&nbsp;4. Controls and
Procedures.</I>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;s disclosure controls and procedures pursuant to Exchange Act Rules&nbsp;13a-15
and 15d-15. Based upon that evaluation, the Trustee concluded that the Trust&#146;s
disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be
disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of
1934 and are effective in ensuring that information required to be disclosed by the Trust in the
reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and
communicated to the Trustee to allow timely decisions regarding required disclosure.
 There has
not been any change in the Trust&#146;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&#146;s internal control over
financial reporting.

<P align="center" style="font-size: 10pt">17</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left"><A NAME="106"></A></DIV>
<P align="center" style="font-size: 10pt">PART II &#151; OTHER INFORMATION



<DIV align="left"><A NAME="107"></A></DIV>
<P align="left" style="font-size: 10pt"><I>Item 1. Legal Proceedings.</I>

<P align="left" style="font-size: 10pt; margin-left: 31px; text-indent:-0px">Not
applicable.



<DIV align="left"><A NAME="108"></A></DIV>

<P align="left" style="font-size: 10pt"><I>Item 1A. Risk Factors.</I>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="100%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">There
have been no material changes in the risk factors disclosed under
Part&nbsp;I, Item 1A of the Trust&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2009.</DIV></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt"><I>Items 2-5 not
applicable.</I>


<DIV align="left"><A NAME="109"></A></DIV>
<P align="left" style="font-size: 10pt"><I>Item&nbsp;6. Exhibits.</I>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibit&nbsp;Number<br>
and Description</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" nowrap><DIV style="margin-left:0px; text-indent:-0px">4(a)*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sabine Corporation  Royalty Trust Agreement effective as of December
31, 1982, by and between Sabine Corporation and InterFirst Bank Dallas, N.A., as trustee.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(b)*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sabine Corporation Louisiana Royalty Trust Agreement effective as of December
31, 1982, by and between Sabine Corporation and Hibernia National Bank in New Orleans, as
trustee, and joined by InterFirst Bank Dallas, N.A., as trustee.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(31) Trustee Certification pursuant to Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(32) Trustee Certification pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">

<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>

</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt; margin-top: 3pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom" style="font-size: 1pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exhibits 4(a) and 4(b) are incorporated herein by reference to Exhibits 4(a) and
4(b), respectively, of the Registrant&#146;s Annual Report on
Form&nbsp;10-K for the year ended
December&nbsp;31, 1993.</TD>
</TR>
</table>


<P align="center" style="font-size: 10pt">18</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">
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<DIV align="left"><A NAME="110"></A></DIV>
<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top">&nbsp;</TD>
    <TD colspan="3">SABINE ROYALTY TRUST<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2">Bank of America, N.A.<br>Trustee<br>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000">/s/ Ron E. Hooper
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">Ron E. Hooper&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">Senior Vice President and
Trust Administrator&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">Date: May&nbsp;4, 2010



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(The Trust has no directors or executive officers.)


<P align="center" style="font-size: 10pt">19</DIV>
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<DIV align="right" style="font-size: 10pt">
<B>EXHIBIT&nbsp;31</B>
</DIV>

<P align="center" style="font-size: 10pt">
<B>CERTIFICATIONS</B>

<P align="left" style="font-size: 10pt">
I, Ron Hooper, certify that:

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;I have reviewed this quarterly report on Form&nbsp;10-Q
of Sabine Royalty Trust, for which Bank of America, N.A. acts as
Trustee;

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;Based on my knowledge, this report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;Based on my knowledge, the financial statements, and
other financial information included in this report,
fairly present in all material respects the financial condition,
distributable income and changes in trust corpus of the
registrant as of, and for, the periods presented in this report;

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.&nbsp;I am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act
Rules&nbsp;13a-15(c) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act
Rules&nbsp;13a-15(f) and 15d-15(f)), or for causing such
controls and procedures to be established and maintained, for
the registrant and I have:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    a)&nbsp;Designed such disclosure controls and procedures, or
    caused such disclosure controls and procedures to be designed
    under my supervision, to ensure that material information
    relating to the registrant, including its consolidated
    subsidiaries, is made known to me by others within those
    entities, particularly during the period in which this report is
    being prepared;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    b)&nbsp;Designed such internal control over financial reporting,
    or caused such internal control over financial reporting to be
    designed under my supervision, to provide reasonable assurance
    regarding the reliability of financial reporting and the of
    financial statements for external purposes; </TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    c)&nbsp;Evaluated the effectiveness of the registrant&#146;s
    disclosure controls and procedures and presented in this report
    my conclusions about the effectiveness of the disclosure
    controls and procedures, as of the end of the period covered by
    this report based on such evaluation; and</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    d)&nbsp;Disclosed in this report any change in the
    registrant&#146;s internal control over financial reporting that
    occurred during the registrant&#146;s most recent fiscal quarter
    (the registrant&#146;s fourth fiscal quarter in the case of an
    annual report) that has materially affected, or is reasonably
    likely to materially affect, the registrant&#146;s internal
    control over financial reporting; and</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.&nbsp;I have disclosed, based on my most recent evaluation of
internal control over financial reporting, to the
registrant&#146;s auditors:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    a)&nbsp;All significant deficiencies and material weaknesses in
    the design or operation of internal control over financial
    reporting which are reasonably likely to adversely affect the
    registrant&#146;s ability to record, process, summarize and
    report financial information; and</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    b)&nbsp;Any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrant&#146;s internal control over financial reporting.</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">By:&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    /s/ Ron Hooper</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" color="black" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    Ron Hooper</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    Senior Vice President and Trust Administrator</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    Bank of America, N.A.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">
Date: May&nbsp;4, 2010

<P align="center">
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<DIV align="right" style="font-size: 10pt">
<B>EXHIBIT 32</B>
</DIV>

<P align="center" style="font-size: 10pt"><B>
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT<BR>
TO SECTION&nbsp;906 OF THE SARBANES-OXLEY ACT OF 2002</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the Quarterly Report of Sabine Royalty Trust
(the &#147;Trust&#148;) on Form&nbsp;10-Q for the quarterly
period ended March 31, 2010 as filed with the Securities
and Exchange Commission on the date hereof (the
&#147;Report&#148;), the undersigned, not in its individual
capacity but solely as the trustee of the Trust, certifies
pursuant to 18&nbsp;U.S.C.&nbsp;1350, as adopted pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, that to its
knowledge:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (1)&nbsp;The Report fully complies with the requirements of
    Section&nbsp;13(a) or 15(d) of the Securities Exchange Act of
    1934, as amended; and</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (2)&nbsp;The information contained in the Report fairly
    presents, in all material respects, the financial condition and
    results of operations of the Trust.</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    BANK OF AMERICA, N.A., TRUSTEE FOR</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    SABINE ROYALTY TRUST</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt">By:&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    /s/ Ron E. Hooper</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" color="black" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    Ron E. Hooper</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left" style="font-size: 10pt">
    Senior Vice President, Royalty Management</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">
Date: May&nbsp;4, 2010

<P align="left" style="font-size: 10pt">
A signed original of this written statement required by
Section&nbsp;906 has been provided to Sabine Royalty Trust and
will be retained by Sabine Royalty Trust and furnished to the
Securities and Exchange Commission or its staff upon request.

<P align="center">&nbsp;
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