8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 8, 2010

WILLIAMS COAL SEAM GAS ROYALTY TRUST

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 001-11608
(Commission
File Number) 75-6437433
(I.R.S. Employer
Identification No.)

Trust Division
Royalty Trust Group
Bank of America, N.A.
901 Main Street, 17th Floor
Dallas, Texas
(Address of principal executive offices) 75202
(Zip Code)

Registrant’s Telephone Number, including area code: (214) 209-2400

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations And Financial Condition.

     On February 5, 2010, the Registrant issued a press release announcing its quarterly cash distribution to unitholders of record on February 16, 2010 and the termination of the Registrant effective March 1, 2010. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

     This Report on Form 8-K is being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. The information furnished is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 7.01 Regulation FD Disclosure.

     Pursuant to the terms of the trust agreement for the Registrant (the “Trust Agreement”), the Registrant will be required to terminate effective March 1, 2010 because the reserve report as of December 31, 2009, reflects that, as of such date, the net present value (discounted at 10 percent) of the estimated future net revenues (calculated in accordance with criteria established by the Securities and Exchange Commission) for proved reserves attributable to the royalty interests but using the average monthly Blanco Hub Spot Price for the past calendar year less certain gathering costs (the “Termination Present Value” as defined in the Trust Agreement) is equal to or less than $30 million thereby triggering a termination of the Registrant. Based on a preliminary report prepared by independent petroleum engineers, the Registrant’s computed Termination Present Value (discounted at 10 percent) of the estimated future net revenues for proved reserves calculated in accordance with the Trust Agreement was approximately $8.2 million.

     Following termination, the trustee will continue to act as trustee of the Registrant until all Registrant’s assets are sold and the net proceeds from such sales distributed to unitholders. The trustee will use best efforts to sell the Registrant’s assets in accordance with the procedures set forth in the Trust Agreement. These procedures are described in more detail in the Registrant’s most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission.

     In accordance with the Trust Agreement, all proceeds of production attributable to the Registrant’s royalty interests will be deposited into a separate account effective as of the March 1, 2010 termination date. If a sale of the royalty interests is made or a definitive contract for sale of the royalty interests is entered into within a 150-day period following the March 1, 2010 termination date, the buyer of the royalty interests, and not the Registrant or the unitholders, will be entitled to all proceeds of production attributable to the royalty interests following the termination date. The Registrant is withholding an additional $100,000 for anticipated expenses relating to this termination process.

     This Report on Form 8-K is being furnished pursuant to Item 7.01, Regulation FD Disclosure. The information furnished is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits

          99.1 Press Release dated February 5, 2010.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Williams Coal Seam Gas Royalty Trust
By:	Bank of America, N.A., Trustee
By:	/s/ RON E. HOOPER
	Ron E. Hooper
	Senior Vice President and Administrator

Date: February 8, 2010

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release dated February 5, 2010.

EX-99.1

Exhibit 99.1

WILLIAMS COAL SEAM GAS ROYALTY TRUST

PRESS RELEASE

Williams Coal Seam Gas Royalty Trust Announces Cash Distribution
for First Quarter and Termination Date for the Trust

          DALLAS, TEXAS, February 5, 2010 — Williams Coal Seam Gas Royalty Trust (NYSE: WTU) announced today that there will be a cash distribution to the holders of its units of beneficial interest of $0.016972 per unit, payable March 1, 2010 to unitholders of record on February 16, 2010.

          The Trust owns net profits interests in certain proved coal seam gas properties owned by Williams Production Company, LLC (WPC) and located in the San Juan Basin of northwestern New Mexico (the “Working Interest Properties”) and southwestern Colorado, including WPC’s 35 percent net profits interest in 5,348 gross acres in La Plata County, Colorado (the “Farmout Properties”). WPC reported that production attributable to its gross interests in the properties burdened by the Trust’s net profits interests was 6.8 trillion British thermal units (TBtu) during the period associated with this quarterly cash distribution compared to 2.6 TBtu during the preceding period. When prior period adjustments and the infill deficits for the last two quarters are excluded, production in the current quarter for the original wells was 3.8 TBtu which includes 1.4 TBtu for infill wells compared to 2.6 TBtu in the preceding quarter which did not include infill wells because of the infill wells being in a deficit for the second and third quarter. The net contract price per MMBtu for this quarter was $1.23 per MMBtu as compared to $0.92 per MMBtu for the previous quarter.

          WPC also reported approximately 449 infill wells have been drilled and of those, 438 wells are producing as of December 31, 2009, and are now in “pay” status to the Trust since early June 2008. Production attributable to the infill wells for this quarter was 1.4 TBtu which does not include 2.91 TBtu attributable to the second and third quarter when infill wells were in deficit and no payment was received for them. In accordance with the original conveyance, the Trust is entitled to only 20% of the net-profit interests from these wells as opposed to the 60% of the original producing wells. Net proceeds from the infill wells were $33,394, which includes the total deficit accumulated through the third quarter of ($32,419.28).

          Gross proceeds prior to deductions for production costs for the fourth quarter of 2009 by property were as follows: $3,282,974 for Working Interest Properties, $382,506 for Farmout Properties. For Working Interest Properties, production costs for the fourth quarter 2009 were as follows: $1,068,244 for royalties, $352,112 for taxes, and $1,026,484 for operating costs. Gross proceeds (Net Profit Interest) from the Farmout Properties after deductions as stated above were $382,506. Gross proceeds prior to deduction for production costs for the infill wells was $4,621,248 which includes $2,497,809 for the deficit quarters. Royalties were $1,642,158 which includes $904,393 for the deficit quarters. Taxes were $486,535 which includes $254,187 for the deficit quarters. Operating costs were $2,171,046 which includes $1,367,995 for the deficit quarters. Capital costs were $154,540 which includes $133,330 for the deficit quarters. Primarily, an increase in the price of natural gas contributed in net proceeds to the Trust of $764,578 for this quarter compared to net proceeds to the Trust of $479,091 in the last quarter.

Termination and Liquidation of the Trust

     Pursuant to the terms of the Trust Agreement, the Trust will be required to terminate effective March 1, 2010 because the reserve report as of December 31, 2009, reflects that, as of such date, the net present value (discounted at 10 percent) of the estimated future net revenues (calculated in accordance with criteria established by the Securities and Exchange Commission) for proved reserves attributable to the royalty interests but using the average monthly Blanco Hub Spot Price for the past calendar year less certain gathering costs (the “Termination Present Value” as defined in the Trust Agreement) is equal to or less than $30 million thereby triggering a termination of the Trust. Based on a preliminary report prepared by independent petroleum engineers, the Trust’s computed Terminiation Present Value (discounted at 10 percent) of the estimated future net revenues for proved reserves calculated in accordance with the Trust Agreement was approximately $8.2 million.

          Following termination, the trustee will continue to act as trustee of the Trust until all Trust assets

are sold and the net proceeds from such sales distributed to unitholders. The trustee will use best efforts to sell the Trust’s assets in accordance with the procedures set forth in the Trust Agreement. These procedures are described in more detail in the Trust’s most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission.

          In accordance with the Trust Agreement, all proceeds of production attributable to the Trust’s royalty interests will be deposited into a separate account effective as of the March 1, 2010 termination date. If a sale of the royalty interests is made or a definitive contract for sale of the royalty interests is entered into within a 150-day period following the March 1, 2010 termination date, the buyer of the royalty interests, and not the Trust or the unitholders, will be entitled to all proceeds of production attributable to the royalty interests following the termination date. The Trust is withholding an additional $100,000 for anticipated expenses relating to this termination process.

          The Trust is a grantor trust formed by The Williams Companies, Inc., parent company of WPC, and was designed to provide unitholders with quarterly cash distributions and tax credits under Section 29 of the Internal Revenue Code, which has expired as of 12/31/2002, from certain coal seam gas properties. The units are listed on The New York Stock Exchange under the symbol “WTU”.

          For additional information, including the latest financial reports on Williams Coal Seam Gas Royalty Trust, please visit our website at http://www.wtu-williamscoalseamgastrust.com/.

* * *

CONTACT:

Ron E. Hooper, Senior Vice President
U.S. Trust, Bank of America Private Wealth Management, Trustee
1.800.365.6544