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+Proc-Type: 2001,MIC-CLEAR
+Originator-Name: webmaster@www.sec.gov
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+<SEC-DOCUMENT>0000950134-02-002820.txt : 20020415
+<SEC-HEADER>0000950134-02-002820.hdr.sgml : 20020415
+ACCESSION NUMBER:		0000950134-02-002820
+CONFORMED SUBMISSION TYPE:	10-K405
+PUBLIC DOCUMENT COUNT:		2
+CONFORMED PERIOD OF REPORT:	20011231
+FILED AS OF DATE:		20020328
+
+FILER:
+
+	COMPANY DATA:	
+		COMPANY CONFORMED NAME:			TIDELANDS ROYALTY TRUST B
+		CENTRAL INDEX KEY:			0000276077
+		STANDARD INDUSTRIAL CLASSIFICATION:	OIL ROYALTY TRADERS [6792]
+		IRS NUMBER:				756007863
+		STATE OF INCORPORATION:			TX
+		FISCAL YEAR END:			1231
+
+	FILING VALUES:
+		FORM TYPE:		10-K405
+		SEC ACT:		1934 Act
+		SEC FILE NUMBER:	000-08677
+		FILM NUMBER:		02590402
+
+	BUSINESS ADDRESS:	
+		STREET 1:		NATIONSBANK OF TEXAS N A
+		STREET 2:		P O BOX 831402
+		CITY:			DALLAS
+		STATE:			TX
+		ZIP:			75283-1402
+		BUSINESS PHONE:		2145081796
+
+	MAIL ADDRESS:	
+		STREET 1:		P O BOX 831402
+		CITY:			DALLAS
+		STATE:			TX
+		ZIP:			75283-1402
+</SEC-HEADER>
+<DOCUMENT>
+<TYPE>10-K405
+<SEQUENCE>1
+<FILENAME>d95431e10-k405.txt
+<DESCRIPTION>FORM 10-K FOR FISCAL YEAR END DECEMBER 31, 2001
+<TEXT>
+<PAGE>
+================================================================================
+
+                       SECURITIES AND EXCHANGE COMMISSION
+                             Washington, D.C. 20549
+
+                                ----------------
+
+                                    FORM 10-K
+
+                [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
+                     OF THE SECURITIES EXCHANGE ACT OF 1934
+                   For the Fiscal Year Ended December 31, 2001
+
+                                       OR
+
+              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
+                     OF THE SECURITIES EXCHANGE ACT OF 1934
+              For the Transition period from ________ to ________ .
+
+                          COMMISSION FILE NUMBER 0-8677
+
+                           TIDELANDS ROYALTY TRUST "B"
+             (Exact name of registrant as specified in its charter)
+
+                   TEXAS                                     75-6007863
+      (State or other jurisdiction                        (I.R.S. Employer
+    of incorporation or organization)                    Identification No.)
+
+        C/O THE CORPORATE TRUSTEE
+           BANK OF AMERICA, N.A.                             75283-0241
+      P.O. BOX 830241, DALLAS, TEXAS                         (Zip Code)
+ (Address of principal executive offices)
+
+        Registrant's telephone number, including area code (800) 985-0794
+
+        Securities registered pursuant to Section 12(b) of the Act: None
+
+           Securities registered pursuant to Section 12(g) of the Act:
+                          Units of Beneficial Interest
+
+                               -------------------
+
+         Indicate by check mark whether the registrant (1) has filed all reports
+required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
+1934 during the preceding 12 months (or for such shorter period that the
+registrant was required to file such reports), and (2) has been subject to such
+filing requirements for the past 90 days.
+
+                              Yes  X    No
+                                  ---       ---
+
+         Indicate by check mark if disclosure of delinquent filers pursuant to
+Item 405 of Regulation S-K is not contained herein, and will not be contained,
+to the best of registrant's knowledge, in definitive proxy or information
+statements incorporated by reference in Part III of this Form 10-K or any
+amendment to this Form 10-K. [X]
+
+         Aggregate market value of the Units of Beneficial Interest held by
+non-affiliates of the Registrant at February 22, 2002: $4,361,822.
+
+         Number of Units of Beneficial Interest outstanding as of December 31,
+2001 - 1,386,375 Units.
+
+         Documents incorporated by reference:  None.
+
+================================================================================
+<PAGE>
+
+
+                              CROSS REFERENCE SHEET
+
+         This Form 10-K for the year ended December 31, 2001, of Tidelands
+Royalty Trust "B" is not organized by conventional item numbers and headings
+contemplated by Securities and Exchange Commission rules. This cross-reference
+page is intended to indicate to the reader where (or under which headings)
+information required under Form 10-K may be found herein.
+
+<Table>
+<Caption>
+  Form 10-K
+Item Numbers                                                                   Headings Herein
+- ------------                                                                   ---------------
+
+<S>          <C>                                                               <C>
+PART I                                                                         General
+
+Item  1.     Business........................................................  The Trust, Properties
+
+Item  2.     Properties......................................................  Properties
+
+Item  3.     Legal Proceedings...............................................  Legal Matters
+
+Item  4.     Submission of Matters to a Vote of Security Holders.............  Unitholder Voting Matters
+
+PART II                                                                        Financial
+
+Item  5.     Market for Registrant's Common Equity and Related
+               Stockholder Matters...........................................  Market and Investor Information
+
+Item  6.     Selected Financial Data.........................................  Selected Financial Data
+
+Item  7.     Management's Discussion and Analysis of Financial
+               Condition and Results of Operations...........................  Management's Discussion and
+                                                                               Analysis of Financial Condition and
+                                                                               Results of Operations
+
+Item  7A.    Quantitative and Qualitative Disclosures About Market Risk......  Quantitative and Qualitative
+                                                                               Disclosure about Market Risk
+
+Item  8.     Financial Statements and Supplementary Data.....................  Financial Statements and
+                                                                               Supplementary Data
+
+Item  9.     Disagreements on Accounting and Financial Disclosure............  Accounting Matters
+
+PART III                                                                       Management and Principal Unitholders
+
+Item 10.     Directors and Executive Officers of the Registrant..............  Administrators
+
+Item 11.     Executive Compensation..........................................  Management Compensation
+
+Item 12.     Security Ownership of Certain Beneficial Owners
+               and Management................................................  Principal Unitholders
+
+Item 13.     Certain Relationships and Related Transactions..................  Management Compensation
+
+PART IV                                                                        Miscellaneous
+
+Item 14.     Exhibits, Financial Statement Schedules, and
+               Reports on Form 8-K...........................................  Exhibits, Financial Statement Schedules,
+                                                                               and Reports on Form 8-K
+</Table>
+
+
+
+                                       2
+<PAGE>
+
+
+                                     GENERAL
+
+                                    THE TRUST
+
+         Organization. Tidelands Royalty Trust "B" ("Tidelands") is a royalty
+trust that was created on June 1, 1954, under the laws of the State of Texas.
+Tidelands is not permitted to engage in any business activity because it was
+organized for the sole purpose of providing an efficient, orderly, and practical
+means for the administration and liquidation of rights to interests in any oil,
+natural gas or other mineral leases obtained by Gulf Oil Corporation ("Gulf") in
+a designated area of the Gulf of Mexico. These rights are evidenced by a
+contract between Tidelands' predecessors and Gulf dated April 30, 1951 (the
+"1951 Contract"), which is binding upon the assignees of Gulf. As a result of
+various transactions that have occurred since 1951, the Gulf interests that were
+subject to the 1951 Contract now are held by Chevron Corporation ("Chevron"),
+Elf Acquitane, Inc. ("Elf"), and their assignees.
+
+         The Tidelands Royalty Trust "B" Indenture, effective June 1, 1954, as
+amended (the "Indenture"), provides that the corporate trustee is to distribute
+all cash in Tidelands, less an amount reserved for the payment of accrued
+liabilities and estimated future expenses, to unitholders of record on the last
+business day of March, June, September, and December of each year. Pursuant to
+the terms of the Indenture, all distributions will be sent within 15 calendar
+days of the record date. Bank of America, N.A. serves as corporate trustee.
+
+         The Indenture as amended provides that the term of the royalty trust
+created to hold the rights under the 1951 Contract will expire on April 30,
+2021, unless extended by the vote of the holders of a majority of the
+outstanding units of beneficial interest.
+
+         Tidelands' wholly-owned subsidiary, Tidelands Royalty "B" Corporation
+("Tidelands Corporation"), holds title to interests in properties subject to the
+1951 Contract that are situated offshore of Louisiana. Ninety-five percent of
+all oil, natural gas, and other mineral royalties collected by this subsidiary
+are paid to Tidelands. Tidelands Corporation, like Tidelands, is prohibited from
+engaging in a trade or business and does only those things necessary for the
+administration and liquidation of its properties.
+
+         Tidelands' only industry segment or purpose is the administration and
+collection of royalties.
+
+         The Contract. The 1951 Contract identifies 60 specific tracts in the
+Gulf of Mexico. These tracts are not all the same size and collectively contain
+approximately 1,370,000 acres (sometimes referred to herein as the "Royalty
+Area"). Prior to the expiration of the 50-year lease acquisition period on April
+30, 2001 (the "Acquisition Expiration Date"), if Chevron, Elf or their assigns
+had acquired a lease or leases on one of the 60 tracts and if oil or natural gas
+were produced and sold from any such tract, then Chevron, Elf or their assigns
+had to make production payments to Tidelands, in an amount equal to
+approximately 12.5% of the value at the wellhead of the oil and natural gas
+subject to such lease until the sum of $1,500,000 has been paid under the lease.
+Thereafter, Tidelands' interest in such tract was converted to an overriding
+royalty and Tidelands received payments equal to approximately 4.17% of the
+value of the oil and natural gas sold as long as the lease on such tract
+existed.
+
+         Tidelands has seven assigned leases. At December 31, 2001, six of
+Tidelands' assigned leases contained producing wells and had paid out their
+$1,500,000 production payments. Tidelands' royalty interest on five of the six
+leases is 4.17%. On the sixth lease the overriding royalty is 1.0416%. One
+recently acquired and assigned lease does not contain any producing wells. This
+lease has not yet paid $1,500,000 in production payments. Tidelands' royalty
+interest on this lease is 12.5%.
+
+         Since the Acquisition Expiration Date, Chevron, Elf and their assignees
+are no longer obligated to assign an interest to the Trust out of any lease that
+was acquired after that date. Tidelands will continue to receive payments on the
+leases acquired by Chevron, Elf or their assignees prior to the Acquisition
+Expiration Date.
+
+         In 2001, approximately 23% of Tidelands' royalty revenues were
+attributable to oil and approximately 77% were attributable to natural gas. The
+production payments and royalty revenues received by Tidelands are affected by
+seasonal fluctuations in demand and by changes in the market price for oil and
+natural gas. During 2001, Tidelands received royalty payments from six working
+interest owners. The following table shows the percentage received each year for
+the past 3 years from those working interest owners:
+
+
+
+                                       3
+<PAGE>
+<Table>
+<Caption>
+                             COMPANY                                      2001             2000              1999
+- ------------------------------------------------------------------    -------------    --------------    -------------
+
+<S>                                                                   <C>              <C>               <C>
+Devon Energy Production Company...................................        68%               68%               --
+Burlington Resources..............................................        12%                7%                6%
+Millenium Offshore Group Inc......................................        12%               --                --
+Petroquest Energy Inc.............................................         4%               --                --
+Dominion Exploration & Production Co..............................         3%               --                --
+Forest Oil Corp...................................................         1%               --                --
+Chevron, USA......................................................        --                 1%                7%
+Pennzenergy Exploration and Production Company....................        --                21%               81%
+</Table>
+
+         Tidelands derives no revenues from foreign sources and has no export
+sales.
+
+         Trust Functions. Tidelands is administered by officers and employees of
+its Trustee, Bank of America, N.A. and its principal accounting officer who
+performs certain management, financial and administrative services for
+Tidelands. See "Management and Principal Unitholders."
+
+         Important aspects of Tidelands' operations are conducted by third
+parties. These include the production and sale of oil and natural gas and the
+calculation of royalty payments to Tidelands, which are conducted by oil and
+natural gas companies that lease tracts subject to Tidelands' interests.
+Similarly, Tidelands' distributions are processed and paid by The Bank of New
+York as the agent for the trustee of Tidelands.
+
+         Marine Petroleum Corporation, a wholly-owned subsidiary of Marine
+Petroleum Trust ("Marine"), a 32.6% unitholder of Tidelands, leases office space
+in Dallas, Texas to provide work space and record storage for Marine, Marine
+Petroleum Corporation, Tidelands and Tidelands Corporation. The cost of this
+office facility is shared by all four of these entities in proportion to each
+entity's gross income to the total of such income of all entities.
+
+         The ability of Tidelands to receive revenues is entirely dependent upon
+its entitlement to its rights with respect to the leases held by Chevron, Elf
+and their assignees in the Gulf of Mexico (as more fully described in
+"Properties" below). Moreover, no revenues are payable to Tidelands until sales
+of production commence from any such lease.
+
+         The royalty interests held by Tidelands are depleting with each barrel
+of oil and mcf of natural gas produced. No funds are reinvested by Tidelands;
+thus, these depleting assets are not being replaced.
+
+
+
+                                       4
+<PAGE>
+
+                                   PROPERTIES
+
+         General. Tidelands is not engaged in oil and natural gas operations.
+Its income is based on oil and natural gas operations of others.
+Tidelands' income is derived from contracts that provide for payments in the
+nature of overriding royalty payments made to Tidelands based on oil and natural
+gas sales from certain leases in the Gulf of Mexico. Tidelands does not own or
+directly lease any physical properties.
+
+         Reserves. Tidelands is not engaged in the production of oil or natural
+gas. Tidelands' income is derived from overriding royalty payments that are
+carved out of working interests in oil and natural gas leases in the Gulf of
+Mexico. Tidelands does not have the engineering data necessary to make an
+estimate of the proved oil and natural gas reserves attributable thereto (nor
+the present value of future net cash flows from such reserves), and is not
+entitled to receive such data from the owners of the working interests from
+which Tidelands' interests are derived. See also "Difficulty in Obtaining
+Certain Data" below.
+
+         Since Tidelands does not have access to this reserve information,
+Tidelands is unable to compute the standardized measure of discounted future net
+cash flows therefrom.
+
+         No reports on oil and natural gas reserves were filed with any federal
+authority or agency during 2001 by Tidelands.
+
+         Production. Information regarding the net quantities of oil and natural
+gas produced with respect to Tidelands' overriding royalty interests for each of
+the last three fiscal years, as well as the average sales price per unit of oil
+and natural gas produced upon which payments to Tidelands are based, is set
+forth below in the following table:
+
+<Table>
+<Caption>
+                                                               2001             2000              1999
+                                                           -------------    --------------    -------------
+
+<S>                                                        <C>              <C>               <C>
+Quantity of royalty oil and natural gas sold:
+    Oil (in barrels ("bbls"))...........................       10,625            12,497            12,810
+
+    Natural gas (in thousand cubic feet ("mcf"))........      201,284           256,706           319,858
+
+Weighted average sales price for royalty oil and
+    natural gas sold:
+    Oil (per bbl)(1)....................................     $  24.72          $  30.39          $  14.73
+
+    Natural gas (per mcf)(1)............................     $   4.49          $   4.67          $   2.87
+
+</Table>
+
+- ----------
+
+(1) The weighted average sales price is based on the market value at the well as
+determined by the operators.
+
+         Information about average production cost (lifting cost) per unit of
+production has been omitted due to its unavailability and inapplicability to
+Tidelands. For more recent information regarding crude oil sales prices, see
+"Management's Discussion and Analysis of Financial Condition and Results of
+Operations" below.
+
+         Interests in Properties. Tidelands' properties consist of production
+payments and overriding royalty interests in 7 oil and natural gas leases
+covering 29,812 gross acres in the 1,370,000 acre Royalty Area. These leases are
+located in the Gulf of Mexico in the Galveston, High Island, Sabine Pass and
+West Cameron areas.
+
+         Productive Properties. Set forth in the table below is certain
+information as of July 31, 2001, concerning gross productive oil and natural gas
+wells and gross leased acres in which Tidelands owns its interests:
+
+<Table>
+<S>                                                                                      <C>
+         GROSS PRODUCTIVE WELLS:
+           Oil.................................................................          3
+                                                                                    ------
+           Natural Gas.........................................................          8
+                                                                                    ------
+         GROSS LEASED ACRES:
+           Productive..........................................................     29,812
+                                                                                    ======
+</Table>
+
+         Information regarding net wells or acres is not included since
+Tidelands does not own any working interests.
+
+
+
+                                       5
+<PAGE>
+         The following table contains information about the average daily
+production attributable to Tidelands' interest, by field, for the six months
+ended July 31, 2000 and 1999. The information for 2001 is the average daily
+production for the month July 2001 and is the most recent production information
+available to Tidelands from the Petroleum Information Corporation for the year
+2001.
+
+<Table>
+<Caption>
+                                                                                        NET Mcf OIL & NATURAL GAS
+                                                                                          EQUIVALENT PER DAY (1)
+                                                                               --------------------------------------------
+                                                                                ONE MONTH              SIX MONTHS
+                                                                                  ENDED                  ENDED
+                                                                                 JULY 31,               JULY 31,
+                                                              YEAR FIRST       ------------   -----------------------------
+                          FIELD                                PRODUCED           2001            2000            1999
+- -----------------------------------------------------         -------------    ------------   -------------    ------------
+
+<S>                                                           <C>              <C>            <C>              <C>
+OFFSHORE TEXAS
+    Galveston Block 303..............................             1987             195              55              117
+    High Island Block 128............................             1989              40             119               51
+OFFSHORE LOUISIANA
+    Sabine Pass Block 13.............................             1981             187             198              193
+    West Cameron Block 165...........................             1969             227             613              751
+    West Cameron Block 225...........................             1969              64              12               12
+</Table>
+
+- ----------
+
+(1) Net oil production is reflected in the amount of its mcf equivalent of
+    natural gas on a btu basis (6 to 1).
+
+         Present Activities. Tidelands currently receives royalties from oil and
+natural gas sold from six leases in the Royalty Area, although delivery
+quantities are subject to seasonal demand.
+
+         Tidelands is not obligated to provide any fixed and determinable
+quantities of oil or natural gas in the future under any existing contracts or
+agreements. Tidelands understands from public records that no activity is being
+undertaken with respect to drilling or workover operations on the six leases
+from which it receives royalties.
+
+         Difficulty in Obtaining Certain Data. Tidelands' only activities are
+the collection and distribution of revenues from overriding royalties on certain
+oil and natural gas leases in the Gulf of Mexico, pursuant to purchase
+agreements between Tidelands' predecessors and Gulf and its transferees. The
+leasehold working interests that are subject to the rights held by Tidelands are
+owned, in most cases, in whole or in part by Chevron, or other oil and natural
+gas exploration and production companies. Certain information as to reserves,
+availability of oil and natural gas, average production cost (lifting cost) per
+unit, undeveloped acreage, net wells and net acres, etc., with respect to the
+particular leases subject to Tidelands' interests lies solely within the
+knowledge of these concerns. Engineering data, if any, regarding these
+leaseholds would have been compiled principally by or for the working interest
+owners of these leaseholders and Tidelands believes that it will not be provided
+access to such information. Because of this, it appears that unreasonable
+efforts and expense would be involved in seeking to obtain all of the
+information required under Item 102 of Regulation S-K and Securities Exchange
+Act of 1934 Industry Guide 2.
+
+
+
+                                       6
+<PAGE>
+
+                                  LEGAL MATTERS
+
+         Neither Tidelands nor Tidelands Corporation, nor any of their
+respective properties, is a party to or subject to any material pending
+litigation as of the date hereof.
+
+                            UNITHOLDER VOTING MATTERS
+
+         During the last quarter of 2001, no matters were presented to the
+unitholders for a vote.
+
+
+
+                                       7
+<PAGE>
+
+                                    FINANCIAL
+
+                         MARKET AND INVESTOR INFORMATION
+
+         Tidelands is authorized to issue 1,386,525 units of beneficial
+interest; 1,386,375 units were held by 396 unitholders of record as of February
+8, 2002. The remaining 150 units are reserved to be issued to specific parties
+if and when they decide to transfer their rights under the 1951 Contract to
+Tidelands. There were no changes in the number of outstanding units of
+beneficial interest during 2001.
+
+         The units of beneficial interest in Tidelands trade in the
+over-the-counter market and are listed in the NASD's Bulletin Board under the
+symbol "TIRTZ." There is limited trading in Tidelands' units of beneficial
+interest. The following table presents information obtained from the National
+Quotation Bureau, Inc. as to the high and low bid prices and includes
+distributions to unitholders, by quarter, for the past two years:
+
+<Table>
+<Caption>
+                                                                                 BID QUOTATION
+                                                                         -------------------------------     DISTRIBUTIONS
+                      YEAR ENDED DECEMBER 31,                                HIGH              LOW             (PER UNIT)
+- ---------------------------------------------------------------------    --------------    -------------    ---------------
+<S>                                                                      <C>               <C>              <C>
+2001
+    First quarter....................................................       $ 5.13            $ 3.94             $ .30
+    Second quarter...................................................         6.05              5.00               .35
+    Third quarter....................................................         6.00              4.60               .20
+    Fourth quarter...................................................         6.11              5.10               .11
+
+2000
+    First quarter....................................................       $ 4.50            $ 3.75             $ .13
+    Second quarter...................................................         4.75              4.00               .19
+    Third quarter....................................................         4.25              3.63               .33
+    Fourth quarter...................................................         4.38              3.63               .22
+</Table>
+
+         Such over-the-counter market quotations reflect interdealer prices
+without retail mark-up, mark-down or commission and may not necessarily
+represent actual transactions.
+
+         Tidelands must distribute to its unitholders all cash accumulated each
+quarter, less an amount reserved for accrued liabilities and estimated future
+expenses. Such distributions have been made since the third quarter of 1977 and
+will continue so long as the income from oil and natural gas royalties exceeds
+administrative costs.
+
+         The Securities and Exchange Commission has neither approved nor
+disapproved Tidelands' Annual Report for its year ended December 31, 2001, nor
+has it passed upon its accuracy or adequacy. While Tidelands' complete Form 10-K
+(excluding exhibits) for the year ended December 31, 2001, is distributed to
+unitholders, a copy of such Form 10-K (without exhibits) is available without
+charge to interested parties. There will be copying and mailing charges for
+copies of any exhibits requested. Written requests should be directed to Ms.
+Cindy Stover Miller, Bank of America, N.A., P.O. Box 830241, Dallas, Texas
+75283-0241.
+
+                             SELECTED FINANCIAL DATA
+
+                     (IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
+
+<Table>
+<Caption>
+                                                     2001         2000         1999         1998         1997
+                                                   -------      -------      -------      -------      -------
+
+<S>                                                <C>          <C>          <C>          <C>          <C>
+Income - oil and natural gas royalties ......      $ 1,166      $ 1,580      $ 1,108      $ 1,228      $ 1,263
+
+Net income ..................................      $ 1,092      $ 1,532      $ 1,071      $ 1,193      $ 1,235
+
+Net income per unit .........................      $   .79      $  1.11      $   .77      $   .86      $   .89
+
+Distributions to unitholders ................      $ 1,332      $ 1,213      $ 1,028      $ 1,104      $ 1,166
+
+Distributions per unit ......................      $   .96      $   .87      $   .74      $   .80      $   .84
+
+Total assets ................................      $ 1,299      $ 1,688      $ 1,560      $ 1,646      $ 2,421
+</Table>
+
+
+
+                                       8
+<PAGE>
+
+                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
+                       CONDITION AND RESULTS OF OPERATIONS
+
+         Capital Resources and Liquidity. Because of the nature of Tidelands as
+a trust entity, there is no requirement for capital; its only obligation is to
+distribute to unitholders the net income actually collected. As an administrator
+of oil and natural gas royalty properties, Tidelands collects income monthly,
+pays expenses of administration, and disburses all net income collected to its
+unitholders each quarter. Because all of Tidelands' revenues are invested in
+liquid funds pending distribution, Tidelands does not experience liquidity
+problems.
+
+         Tidelands' Indenture (and the charter and by-laws of Tidelands
+Corporation) expressly prohibits the operation of any kind of trade or business.
+Tidelands' oil and natural gas properties are depleting assets and are not being
+replaced due to the prohibition against these investments. Because of these
+restrictions, Tidelands does not require short term or long term capital. These
+restrictions, along with other factors, allow Tidelands to be treated as a
+grantor trust; thus all income and deductions, for tax purposes, should flow
+through to each individual unitholder. Tidelands is not a taxable entity.
+
+         Results of Operations. Tidelands' revenues are derived from the oil and
+natural gas production activities of unrelated parties. Tidelands' revenues and
+distributions fluctuate from period to period based upon factors beyond
+Tidelands' control, including without limitation the number of leases subject to
+Tidelands' interests, the number of productive wells drilled on leases subject
+to Tidelands' interests, the level of production over time from such wells and
+the prices at which the oil and natural gas from such wells are sold. Tidelands
+believes that it will continue to have revenues sufficient to permit
+distributions to be made to unitholders for the foreseeable future, although no
+assurance can be made regarding the amounts thereof. The foregoing sentence is a
+forward-looking statement. Factors that might cause actual results to differ
+from expected results include reductions in prices or demand for oil and natural
+gas, which might then lead to decreased production; reductions in production due
+to depletion of existing wells or disruptions in service, including as the
+result of storm damage, blowouts or other production accidents, and geological
+changes such as cratering of productive formations; expiration or release of
+leases subject to Tidelands' interests.
+
+         Tidelands' income consists primarily of oil and natural gas royalties
+and is based on the value at the well of Tidelands' percentage interest in
+oil and natural gas sold without reduction for production expenses. Value at the
+well for oil is the purchasers' posted price at its receiving point onshore,
+less the cost of transportation from the offshore lease to the onshore receiving
+point. In general, value at the well is determined on the basis of the selling
+price of oil, natural gas and other minerals produced, saved and sold, or at
+wellhead prices determined by industry standards, where the selling price does
+not reflect value at the well. In the event an agreement is not arms-length in
+nature, the value is based upon current market prices.
+
+         Summary Review. Tidelands' net income in 2001 amounted to $1,092,273 or
+$.79 per unit as compared to $1,532,381 or $1.11 per unit in 2000 and $1,070,861
+or $.77 per unit in 1999. Distributions per unit were $.96 in 2001, $.87 in 2000
+and $.74 in 1999.
+
+         Administrative expenses increased approximately $15,000 (16%) in 2001
+due primarily to the cost of soliciting the unitholders vote to extend the life
+of the trust.
+
+         Production of both oil and natural gas has declined over the past three
+years while prices have fluctuated. The following table present the results of
+these factors for the past three years:
+
+
+
+                                       9
+<PAGE>
+
+
+<Table>
+<Caption>
+                                                                         2001             2000              1999
+                                                                     -------------    --------------    -------------
+
+<S>                                                                     <C>              <C>              <C>
+QUANTITY OF ROYALTY OIL AND NATURAL GAS SOLD:
+    Oil (bbls)...........................................                10,625             12,498            12,810
+    Natural gas (mcf)....................................               201,284            256,706           319,858
+
+WEIGHTED AVERAGE SALES PRICE FOR ROYALTY OIL AND
+    NATURAL GAS SOLD:
+    Oil (per bbl)(1)....................................               $  24.72           $  30.39          $  14.73
+    Natural gas (per mcf)(1)...........................                $   4.49           $   4.67          $   2.87
+</Table>
+
+- ----------
+
+(1) The weighted average sale price is based on the market value at the well as
+    determined by the operators.
+
+         Tidelands retains a funded reserve for possible royalty overpayments
+received in various years from 1988 through 1993. As of December 31, 2001,
+Tidelands retained a funded reserve of approximately $127,000 for possible
+royalty overpayments in the future.
+
+         During the years ended December 31, 2000 and 1999, respectively,
+Tidelands restored to income $251,534 and $258,902 of its contingency reserve
+that management determined was no longer needed to cover refunds that may be
+required upon redetermination of natural gas prices for royalty payments in
+prior periods. Net income per unit was increased $.18 and $.19 in 2000 and 1999,
+respectively by this decision.
+
+         The following table and related discussion and analysis shows the
+royalty income, the net quantities sold, and the average price received for oil
+and natural gas during the past three years excluding Tidelands' equity interest
+in Marine and the $251,534 and $258,902 realized in fiscal 2000 and fiscal 1999,
+respectively, from the reduction of the previously established accounts payable
+for possible royalty over-payments that management no longer deemed required.
+The following table presents comparative operating data which reflects these
+underlying circumstances.
+
+<Table>
+<Caption>
+                                                      FOR YEARS ENDED DECEMBER 31,
+                                            -------------------------------------------------
+                                                2001              2000             1999
+                                            --------------    -------------    --------------
+<S>                                         <C>               <C>              <C>
+INCOME:
+    Oil royalties (1) ..................      $   262,623      $   379,828      $   188,643
+    Natural gas royalties ..............          903,587        1,200,083          919,376
+                                              -----------      -----------      -----------
+                                              $ 1,166,210      $ 1,579,911      $ 1,108,019
+NET PRODUCTION QUANTITIES:
+    Oil (bbls) .........................           10,625           12,498           12,810
+    Natural gas (mcf) ..................          201,284          256,706          319,858
+
+AVERAGE NET PRICES:
+    Oil (1) ............................      $     24.72      $     30.39      $     14.73
+    Natural gas (2) ....................      $      4.49      $      4.67      $      2.87
+</Table>
+
+- ----------
+
+(1) These amounts are net of the cost of transportation from offshore leases to
+    onshore receiving points.
+
+(2) The average price in 2000 includes $.98 per mcf attributable to the $251,534
+    reserve reduction for that year. The average price in 1999 includes $.81 per
+    mcf attributable to the $258,902 reserve reduction for that year.
+
+         Oil and Natural Gas Royalties -- 2001 and 2000: During fiscal 2001,
+Tidelands received approximately 23% of its royalty income from the sale of oil
+and 77% from the sale of natural gas. Income from such oil and natural gas
+royalties in fiscal 2001 decreased approximately 26% from fiscal 2000.
+
+         Revenue from oil royalties amounted to $262,623 in fiscal 2001, a
+decrease of 31% as compared to the $379,838 realized in fiscal 2000. The average
+price of a barrel of oil decreased 19% to $24.72 as compared to $30.39 for
+fiscal 2000 and production decreased 15% to 10,625 barrels as compared to 12,498
+barrels in fiscal 2000. Please refer to the table above.
+
+         Revenue from natural gas royalties amounted to $903,587, a decrease of
+25% as compared to the $1,200,083 realized in fiscal 2000. The average price of
+a thousand cubic feet (mcf) of natural gas decreased 4% to $4.49 as compared to
+$4.67 for fiscal 2000 and production decreased 22% to 201,284 mcf as compared to
+256,706 mcf in fiscal 2000. Please refer to the table above.
+
+
+
+                                       10
+<PAGE>
+
+         Oil and Natural Gas Royalties -- 2000 and 1999: During fiscal 2000,
+Tidelands received approximately 24% of its royalty income from the sale of oil
+and 76% from the sale of natural gas. Income from such oil and natural gas
+royalties in fiscal 2000 increased approximately 43% from fiscal 1999.
+
+         Oil royalties during fiscal 2000 in the amount of $379,828 were 101%
+more than oil royalties received in fiscal 1999 in the amount of $188,643, due
+to an increase in the average price received that was partially offset by a
+decrease in the quantity of oil sold.
+
+         Natural gas royalties during fiscal 2000 in the amount of $1,200,083
+were 31% higher than natural gas royalties received in fiscal 1999 in the amount
+of $919,376. The increase was due to an increase in the price received that was
+partially offset by a decrease in the quantity of natural gas sold.
+
+
+
+                                       11
+<PAGE>
+
+
+            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
+
+         At December 31, 2001, Tidelands did not have any market risk exposure
+with regard to any activities in derivative financial instruments, other
+financial instruments and derivative commodity instruments.
+
+                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
+
+         Tidelands' consolidated financial statements listed in the following
+index, together with the related notes and the report of KPMG LLP, independent
+certified public accountants, are presented on pages 15 through 22 hereof:
+
+<Table>
+<Caption>
+                                                                                                             PAGE
+                                                                                                             ----
+
+<S>                                                                                                           <C>
+- -- Independent Auditors' Report........................................................................       15
+- -- Consolidated Balance Sheets as of December 31, 2001 and 2000........................................       16
+- -- Consolidated Statements of Income and Undistributed Income for the Three Years Ended December 31,
+   2001................................................................................................       17
+- -- Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2001...................       18
+- -- Notes to Consolidated Financial Statements..........................................................       19
+</Table>
+
+         See also "Exhibits, Financial Statement Schedules and Reports on Form
+8-K" of this Form 10-K for further information concerning the financial
+statements of Tidelands and its subsidiaries.
+
+         All schedules have been omitted because they are not required or
+because the required information is shown in the consolidated financial
+statements or notes thereto.
+
+                               ACCOUNTING MATTERS
+
+         During 2001 and 2000 there were no disagreements by Tidelands with its
+principal accountants on any matter of accounting principles or practices or
+financial statement disclosure.
+
+
+
+                                       12
+
+<PAGE>
+
+
+                      MANAGEMENT AND PRINCIPAL UNITHOLDERS
+
+                                 ADMINISTRATORS
+
+         Tidelands is a trust created under the laws of the State of Texas.
+Tidelands' Indenture does not provide for directors or officers or the election
+of directors or officers. Under the Indenture, Bank of America, N.A. serves as
+Trustee.
+
+         R. Ray Bell may be considered a significant employee of Tidelands. Mr.
+Bell has been involved in the administration of Tidelands since its inception.
+He is 74 years old, and since July 1, 1977, Mr. Bell has been employed by Marine
+Petroleum Corporation, a subsidiary of Marine, as president, vice president and
+director. Mr. Bell will serve in such capacities until the next annual meeting
+of directors of Marine Petroleum Corporation or until his successor is elected
+and qualified. Mr. Bell acts as the principal accounting officer of Tidelands
+for purposes of Tidelands' filings with the SEC.
+
+                             MANAGEMENT COMPENSATION
+
+         During Tidelands' fiscal year ended December 31, 2001, Tidelands paid
+or accrued fees of $19,713 to Bank of America, N.A., as corporate trustee.
+During Tidelands' fiscal year ended December 31, 2001, Tidelands paid $17,042 to
+Marine Petroleum Corporation as its share of certain administrative expenses.
+These expenses are shared in the ratio of each of Tidelands' and Marine's gross
+receipts to the total gross receipts of both trusts.
+
+                              PRINCIPAL UNITHOLDERS
+
+         The following table sets forth the persons known to Tidelands who own
+beneficially more than five percent of its outstanding units of beneficial
+interest:
+
+<Table>
+<Caption>
+                                                                         AMOUNT BENEFICIALLY
+                                        NAME AND ADDRESS OF                  OWNED AS OF                 PERCENT
+        TITLE OF CLASS                    BENEFICIAL OWNER                DECEMBER 31, 2001             OF CLASS
+- -------------------------------    -------------------------------    ---------------------------   ------------------
+
+<S>                                <C>                                <C>                           <C>
+Units of Beneficial Interest       Marine Petroleum Trust                      452,366                    32.6%
+                                   P.O. Box 830241
+                                   Dallas, Texas  75283-0241
+</Table>
+
+         There are no executive officers or directors of Tidelands. Bank of
+America, N.A. does not beneficially own any units of beneficial interest.
+
+
+
+                                       13
+<PAGE>
+                                  MISCELLANEOUS
+
+        EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
+
+
+(a) Financial Statements -- See "Financial Statements and Supplementary Data"
+above.
+
+         The consolidated financial statements, together with the related notes
+and the reports of KPMG LLP, independent certified public accountants, as
+contained in the Form 10-K of Marine Petroleum Trust for its fiscal year ended
+June 30, 2001 and filed with the Securities and Exchange Commission, are hereby
+incorporated herein by reference for all purposes.
+
+(b) Reports on Form 8-K -- No reports on Form 8-K have been filed during the
+last quarter of the fiscal year ended December 31, 2001.
+
+(c) Exhibits
+
+      3.1         Indenture of Trust dated June 1, 1954, as amended, filed as
+                  an Exhibit to Tidelands' Quarterly Report on Form 10-Q for the
+                  period ended September 30, 2001, filed with the Securities and
+                  Exchange Commission on November 14, 2001, and incorporated
+                  herein by reference.
+
+      21.1        Subsidiaries of Tidelands.
+
+
+
+                                       14
+<PAGE>
+
+                          INDEPENDENT AUDITORS' REPORT
+
+The Trustee
+Tidelands Royalty Trust "B":
+
+         We have audited the accompanying consolidated balance sheets of
+Tidelands Royalty Trust "B" ("Tidelands") and subsidiary as of December 31, 2001
+and 2000, and the related consolidated statements of income and undistributed
+income and cash flows for each of the years in the three-year period ended
+December 31, 2001. These consolidated financial statements are the
+responsibility of Tidelands' management. Our responsibility is to express an
+opinion on these consolidated financial statements based on our audits.
+
+         We conducted our audits in accordance with auditing standards generally
+accepted in the United States of America. Those standards require that we plan
+and perform the audit to obtain reasonable assurance about whether the financial
+statements are free of material misstatement. An audit includes examining, on a
+test basis, evidence supporting the amounts and disclosures in the financial
+statements. An audit also includes assessing the accounting principles used and
+significant estimates made by management, as well as evaluating the overall
+financial statement presentation. We believe that our audits provide a
+reasonable basis for our opinion.
+
+         In our opinion, the consolidated financial statements referred to above
+present fairly, in all material respects, the financial position of Tidelands
+Royalty Trust "B" and subsidiary as of December 31, 2001 and 2000 and the
+results of their operations and their cash flows for each of the years in the
+three-year period ended December 31, 2001, in conformity with accounting
+principles generally accepted in the United States of America.
+
+Dallas, Texas
+January 29, 2002                                      /s/ KPMG LLP
+
+
+
+                                       15
+<PAGE>
+
+                   TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
+
+                           CONSOLIDATED BALANCE SHEETS
+                           DECEMBER 31, 2001 AND 2000
+
+
+<Table>
+<Caption>
+                                                                           2001             2000
+                                                                       -----------      -----------
+<S>                                                                    <C>              <C>
+                                     ASSETS
+
+Current assets:
+    Cash and cash equivalents ...................................      $ 1,165,980      $ 1,339,233
+    Oil and natural gas royalties receivable ....................          122,563          346,705
+    Federal income taxes receivable .............................           10,520            2,450
+                                                                       -----------      -----------
+        Total current assets ....................................        1,299,063        1,688,388
+Oil, natural gas and other mineral properties ...................                2                2
+                                                                       -----------      -----------
+                                                                       $ 1,299,065      $ 1,688,390
+                                                                       ===========      ===========
+
+                          LIABILITIES AND TRUST EQUITY
+
+Current liabilities:
+    Accounts payable (note 3) ...................................      $   131,584      $   131,885
+    Income distributable to unitholders .........................          152,772          301,615
+                                                                       -----------      -----------
+        Total current liabilities ...............................          284,356          433,500
+                                                                       -----------      -----------
+
+Trust equity:
+    Corpus - authorized 1,386,525 units of beneficial interest,
+        issued 1,386,375 units at nominal value .................                2                2
+    Undistributed income (note 2) ...............................        1,014,707        1,254,888
+                                                                       -----------      -----------
+        Total trust equity ......................................        1,014,709        1,254,890
+                                                                       -----------      -----------
+                                                                       $ 1,299,065      $ 1,688,390
+                                                                       ===========      ===========
+</Table>
+
+
+          See accompanying notes to consolidated financial statements.
+
+
+
+                                       16
+<PAGE>
+
+                   TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
+
+           CONSOLIDATED STATEMENTS OF INCOME AND UNDISTRIBUTED INCOME
+                       THREE YEARS ENDED DECEMBER 31, 2001
+
+
+<Table>
+<Caption>
+                                                           2001             2000             1999
+                                                        -----------      -----------      -----------
+
+<S>                                                     <C>              <C>              <C>
+Income:
+    Oil and natural gas royalties ................      $ 1,166,210      $ 1,579,911      $ 1,108,019
+    Interest and other ...........................           45,742           70,438           66,786
+                                                        -----------      -----------      -----------
+        Total income .............................        1,211,952        1,650,349        1,174,805
+
+Expenses:
+    General and administrative ...................          107,650           93,140           87,144
+                                                        -----------      -----------      -----------
+        Income before federal income taxes .......        1,104,302        1,557,209        1,087,661
+
+Federal income taxes of subsidiary (note 1(e)) ...           12,029           24,828           16,800
+                                                        -----------      -----------      -----------
+        Net income ...............................        1,092,273        1,532,381        1,070,861
+
+Undistributed income at beginning of year ........        1,254,888          935,514          893,022
+                                                        -----------      -----------      -----------
+                                                          2,347,161        2,467,895        1,963,883
+Distributions to unitholders .....................        1,332,454        1,213,007        1,028,369
+                                                        -----------      -----------      -----------
+Undistributed income at end of year ..............      $ 1,014,707      $ 1,254,888      $   935,514
+                                                        ===========      ===========      ===========
+Net income per unit ..............................      $       .79      $      1.11      $       .77
+                                                        ===========      ===========      ===========
+Distributions per unit ...........................      $       .96      $       .87      $       .74
+                                                        ===========      ===========      ===========
+Weighted average units outstanding ...............        1,386,375        1,386,375        1,386,375
+                                                        ===========      ===========      ===========
+</Table>
+
+
+          See accompanying notes to consolidated financial statements.
+
+
+
+                                       17
+<PAGE>
+
+                   TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
+
+                      CONSOLIDATED STATEMENTS OF CASH FLOWS
+                       THREE YEARS ENDED DECEMBER 31, 2001
+
+<Table>
+<Caption>
+                                                                                       2001              2000              1999
+                                                                                   -----------       -----------       -----------
+<S>                                                                                <C>               <C>               <C>
+Cash flows from operating activities:
+    Net income ..............................................................      $ 1,092,273       $ 1,532,381       $ 1,070,861
+    Adjustments to reconcile net income to net cash provided
+        by operating activities:
+        Change in assets and liabilities:
+            Oil and natural gas royalties receivable ........................          224,142          (250,615)           17,124
+            Federal income taxes receivable .................................           (8,070)           (2,450)            7,578
+            Accounts payable ................................................             (301)         (253,130)         (260,552)
+            Federal income tax payable ......................................             --                (211)              211
+                                                                                   -----------       -----------       -----------
+                Net cash provided by operating activities ...................        1,308,044         1,025,975           835,222
+Cash flows from financing activities - cash distributions
+    to unitholders ..........................................................       (1,481,297)       (1,150,869)         (896,226)
+                                                                                   -----------       -----------       -----------
+                Net increase (decrease) in cash and cash equivalents ........         (173,253)         (124,894)          (61,004)
+Cash and cash equivalents at beginning of year ..............................        1,339,233         1,464,127         1,525,131
+                                                                                   -----------       -----------       -----------
+Cash and cash equivalents at end of year ....................................      $ 1,165,980       $ 1,339,233       $ 1,464,127
+                                                                                   ===========       ===========       ===========
+</Table>
+
+
+          See accompanying notes to consolidated financial statements.
+
+
+
+                                       18
+<PAGE>
+
+                   TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
+
+                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+                                DECEMBER 31, 2001
+
+
+(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL
+
+         (a) General
+
+         Tidelands Royalty Trust "B" ("Tidelands") was established on June 1,
+1954 with a transfer of contract rights to certain properties to Tidelands in
+exchange for units of beneficial interest. The contract rights enable Tidelands
+to receive an interest in any oil, natural gas or other mineral leases obtained
+by Gulf Oil Corporation, now Chevron U.S.A., Inc. (Chevron) which is a
+subsidiary of Chevron Corporation, and its assignees in a designated area of the
+Gulf of Mexico during a 50-year period beginning April 30, 1951.
+
+         Tidelands is required under its indenture to distribute all income,
+after paying its liabilities and obligations, to the unitholders quarterly.
+Tidelands cannot invest any of its money for any purpose and cannot engage in a
+trade or business.
+
+         Tidelands' wholly-owned subsidiary, Tidelands Royalty "B" Corporation
+("Tidelands Corporation"), holds title to interests in properties that are
+situated offshore of Louisiana. Ninety-five percent of all oil, natural gas, and
+other mineral royalties collected by this subsidiary are paid to Tidelands.
+Tidelands Corporation, like Tidelands, is prohibited from engaging in a trade or
+business and does only those things necessary for the administration and
+liquidation of its properties. Tidelands is authorized to pay expenses of
+Tidelands Corporation should it be necessary.
+
+         Tidelands and its subsidiary have no employees. Tidelands has entered
+into an arrangement with Marine Petroleum Corporation (a wholly-owned subsidiary
+of Marine Petroleum Trust, an affiliate of Tidelands) to share certain
+administrative expenses. The sole purpose of this arrangement is to assist the
+trustees in the administration of the trusts. At December 31, 2001 and 2000,
+Marine Petroleum Trust owned 32.6% of Tidelands' outstanding units of beneficial
+interest.
+
+         (b) Unitholder Voting Matters
+
+         On March 27, 2001, the unitholders of record at the close of business
+on February 16, 2001, approved an amendment to the Indenture to extend the life
+of the trust beyond the original expiration date of April 30, 2001 to April 30,
+2021.
+
+         (c) Principles of Consolidation
+
+         The consolidated financial statements include Tidelands and its
+wholly-owned subsidiary. All intercompany accounts and transactions have been
+eliminated in consolidation.
+
+         (d) Oil, Natural gas and Other Mineral Properties
+
+         At the time Tidelands was established, no determinable market value was
+available for the assets transferred to Tidelands; consequently, nominal values
+were assigned. Accordingly, no allowance for depletion has been computed.
+
+
+
+                                       19
+<PAGE>
+
+
+                   TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
+
+            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
+
+
+         Tidelands' revenues are derived from production payments and overriding
+royalty interests related to properties located in the Gulf of Mexico.
+
+         Net revenues from oil and natural gas royalties related to proved
+developed oil and natural gas reserves were $1,166,210, $1,579,911 and
+$1,108,019 in 2001, 2000, and 1999, respectively.
+
+         (e) Federal Income Taxes
+
+         No provision has been made for Federal income taxes on Tidelands'
+income since such taxes are the liability of the unitholders. Federal income
+taxes have been provided on the income of Tidelands Corporation, excluding the
+95% of oil and natural gas royalties to be distributed to Tidelands and after
+deducting statutory depletion.
+
+         (f) Credit Risk Concentration and Cash Equivalents
+
+         Financial instruments which potentially subject Tidelands and its
+wholly-owned subsidiary to concentrations of credit risk are primarily
+investments in cash equivalents and unsecured oil and natural gas royalties
+receivable. Tidelands and its wholly-owned subsidiary place their cash
+investments with financial institutions that management considers creditworthy
+and limit the amount of credit exposure from any one financial institution.
+Royalties receivable are from large creditworthy companies and Tidelands
+historically has not encountered collection problems. The estimated fair values
+of cash equivalents and oil and natural gas royalties receivable approximate the
+carrying values due to the short term nature of these financial instruments.
+
+         Cash equivalents of $998,213 and $1,007,057 at December 31, 2001 and
+2000, respectively, consist of cash held in a money market account that invests
+in U.S. Treasury securities. For purposes of the statements of cash flows,
+Tidelands considers all investments with original maturities of three months or
+less to be cash equivalents.
+
+         (g) Statements of Cash Flows
+
+         Tidelands Corporation paid $20,100, $27,488, and $9,011 in federal
+income taxes in 2001, 2000, and 1999, respectively. No payments of interest were
+made in 2001, 2000 and 1999.
+
+         (h) Use of Estimates
+
+         The preparation of financial statements in conformity with accounting
+principles generally accepted in the United States requires management to make
+estimates and assumptions that affect the reported amounts of assets and
+liabilities and disclosure of contingent assets and liabilities at the date of
+the financial statements and the reported amounts of revenues and expenses
+during the reporting period. Actual results could differ from those estimates.
+
+         (i) Net Income per Unit
+
+         Net income per unit is determined by dividing net income by the
+weighted average number of units of beneficial interest outstanding during the
+period.
+
+
+
+                                       20
+<PAGE>
+
+                   TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
+
+            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
+
+
+         (j) Significant Royalty Sources
+
+         Royalty revenue received by Tidelands from producers is summarized as
+follows:
+
+<Table>
+<Caption>
+                                                              2001             2000              1999
+                                                          -------------    --------------    -------------
+
+<S>                                                       <C>               <C>              <C>
+Devon Energy Production Company .......................         68%                68%              --
+Pennzenergy ...........................................         --                 21%              81%
+Burlington Resources Oil and Natural gas Company ......         12%                 7%               6%
+Millenium Offshore Group ..............................         12%                --               --
+Others ................................................          8%                 4%              13%
+                                                              ----               ----             ----
+                                                               100%               100%             100%
+                                                              ====               ====             ====
+</Table>
+
+(2) UNDISTRIBUTED INCOME
+
+         Undistributed income includes $828,185 and $768,503 applicable to the
+subsidiary corporation at December 31, 2001 and 2000, respectively.
+
+(3) OVERPAID ROYALTIES
+
+         Tidelands recorded a liability for possible royalty overpayments
+received in various years from 1988 through 1993, which is reflected in accounts
+payable in the accompanying consolidated balance sheets. During 2000 and 1999,
+Tidelands determined that $251,534 and $258,902, respectively, was no longer
+required to be reserved, because it was no longer probable that repayment of
+such amounts actually would be required. Accordingly, accounts payable was
+reduced and oil and natural gas royalty income was increased by such amounts for
+each respective year.
+
+(4) SUPPLEMENTAL INFORMATION RELATING TO OIL AND NATURAL GAS RESERVES
+(UNAUDITED)
+
+         Oil and natural gas reserve information relating to Tidelands' royalty
+interests is not presented because such information is not available to
+Tidelands. Tidelands' share of oil and natural gas produced for its royalty
+interests was as follows: oil (barrels) - 10,625 in 2001, 12,497 in 2000 and
+12,810 in 1999; and natural gas (mcf) - 201,284 in 2001, 256,706 in 2000, and
+319,858 in 1999.
+
+(5) SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)
+
+         The following quarterly financial information for the years ended
+December 31, 2001 and 2000 is unaudited; however, in the opinion of management,
+all adjustments necessary to present a fair statement of the results of
+operations for the interim periods have been included.
+
+
+
+                                       21
+<PAGE>
+
+<Table>
+<Caption>
+                                                    OIL AND
+                                                   NATURAL GAS            NET           NET INCOME
+                                                    ROYALTIES           INCOME           PER UNIT
+                                                   ------------      ------------      ------------
+
+<S>                                                <C>               <C>               <C>
+Quarter ended:
+    March 31, 2001 ..........................      $    414,238      $    382,398      $        .28
+    June 30, 2001 ...........................           320,182           296,692      $        .21
+    September 30, 2001 ......................           244,820           237,452      $        .17
+    December 31, 2001 .......................           186,970           175,731      $        .13
+                                                   ------------      ------------      ------------
+                                                   $  1,166,210      $  1,092,273      $        .79
+                                                   ============      ============      ============
+
+Quarter ended:
+    March 31, 2000 ..........................      $    228,498      $    216,758      $        .16
+    June 30, 2000 ...........................           247,622           233,253      $        .17
+    September 30, 2000 ......................           633,667           617,334      $        .45
+    December 31, 2000 .......................           470,124           465,036      $        .34
+                                                   ------------      ------------      ------------
+                                                   $  1,579,911      $  1,532,381      $       1.11
+                                                   ============      ============      ============
+</Table>
+
+
+
+                                       22
+<PAGE>
+
+
+                                   SIGNATURES
+
+         Pursuant to the requirements of Section 13 or 15(d) of the Securities
+Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form
+10-K to be signed by the undersigned thereunto duly authorized.
+
+                                     TIDELANDS ROYALTY TRUST "B"
+                                     (Registrant)
+
+                                     By:  Bank of America, N.A.
+                                          -------------------------------------
+                                          (in its capacity as Corporate Trustee
+                                          of Tidelands Royalty Trust "B" and not
+                                          in its individual capacity or
+                                          otherwise)
+
+            Date: March 27, 2002     By:  /s/ CINDY STOVER MILLER
+                                          -------------------------------------
+                                          Cindy Stover Miller
+                                          Vice President
+
+         Pursuant to the requirements of the Securities Exchange Act of 1934,
+this Annual Report on Form 10-K has been signed below by the following persons
+on behalf of the Registrant and in the capacities and on the dates indicated.
+
+<Table>
+<Caption>
+NAME                                         CAPACITIES                        DATE
+- ----                                         ----------                        ----
+
+<S>                                          <C>                               <C>
+Bank of America, N.A.                        Corporate Trustee                 March 27, 2002
+
+By: /s/ CINDY STOVER MILLER
+    ------------------------
+       Cindy Stover Miller
+         Vice President
+
+
+/s/ R. RAY BELL                              Principal Accounting Officer      March 27, 2002
+- -----------------------
+R. Ray Bell
+</Table>
+
+
+
+                                       23
+<PAGE>
+                                  EXHIBIT INDEX
+<Table>
+<Caption>
+Exhibit
+Number            Description
+- ------            -----------
+
+<S>               <C>
+3.1               Indenture of Trust dated June 1, 1954, as amended, filed as an Exhibit to Tidelands' Quarterly Report on
+                  Form 10-Q for the period ended September 30, 2001, filed with the Securities and Exchange Commission on
+                  November 14, 2001, and incorporated herein by reference.
+
+21.1              Subsidiaries of Tideland Royalty Trust "B"
+</Table>
+
+
+</TEXT>
+</DOCUMENT>
+<DOCUMENT>
+<TYPE>EX-21.1
+<SEQUENCE>3
+<FILENAME>d95431ex21-1.txt
+<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
+<TEXT>
+<PAGE>
+
+                                                                    EXHIBIT 21.1
+
+
+
+                            SUBSIDIARIES OF TIDELANDS
+
+
+1) Tidelands Royalty "B" Corporation
+
+
+
+</TEXT>
+</DOCUMENT>
+</SEC-DOCUMENT>
+-----END PRIVACY-ENHANCED MESSAGE-----