Upload fraud/2002//0000950134-02-002820.txt with huggingface_hub
Browse files- fraud/2002/0000950134-02-002820.txt +1399 -0
fraud/2002/0000950134-02-002820.txt
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|
| 1 |
+
-----BEGIN PRIVACY-ENHANCED MESSAGE-----
|
| 2 |
+
Proc-Type: 2001,MIC-CLEAR
|
| 3 |
+
Originator-Name: webmaster@www.sec.gov
|
| 4 |
+
Originator-Key-Asymmetric:
|
| 5 |
+
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
|
| 6 |
+
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
|
| 7 |
+
MIC-Info: RSA-MD5,RSA,
|
| 8 |
+
QWcs8bgo/FzT19rnW/mTOKRteLHZTNF7EQvptDzRkcKvqnCX33OVJA0qJ/Z17C45
|
| 9 |
+
ODN8figGOWT6ksnw9DdmUw==
|
| 10 |
+
|
| 11 |
+
<SEC-DOCUMENT>0000950134-02-002820.txt : 20020415
|
| 12 |
+
<SEC-HEADER>0000950134-02-002820.hdr.sgml : 20020415
|
| 13 |
+
ACCESSION NUMBER: 0000950134-02-002820
|
| 14 |
+
CONFORMED SUBMISSION TYPE: 10-K405
|
| 15 |
+
PUBLIC DOCUMENT COUNT: 2
|
| 16 |
+
CONFORMED PERIOD OF REPORT: 20011231
|
| 17 |
+
FILED AS OF DATE: 20020328
|
| 18 |
+
|
| 19 |
+
FILER:
|
| 20 |
+
|
| 21 |
+
COMPANY DATA:
|
| 22 |
+
COMPANY CONFORMED NAME: TIDELANDS ROYALTY TRUST B
|
| 23 |
+
CENTRAL INDEX KEY: 0000276077
|
| 24 |
+
STANDARD INDUSTRIAL CLASSIFICATION: OIL ROYALTY TRADERS [6792]
|
| 25 |
+
IRS NUMBER: 756007863
|
| 26 |
+
STATE OF INCORPORATION: TX
|
| 27 |
+
FISCAL YEAR END: 1231
|
| 28 |
+
|
| 29 |
+
FILING VALUES:
|
| 30 |
+
FORM TYPE: 10-K405
|
| 31 |
+
SEC ACT: 1934 Act
|
| 32 |
+
SEC FILE NUMBER: 000-08677
|
| 33 |
+
FILM NUMBER: 02590402
|
| 34 |
+
|
| 35 |
+
BUSINESS ADDRESS:
|
| 36 |
+
STREET 1: NATIONSBANK OF TEXAS N A
|
| 37 |
+
STREET 2: P O BOX 831402
|
| 38 |
+
CITY: DALLAS
|
| 39 |
+
STATE: TX
|
| 40 |
+
ZIP: 75283-1402
|
| 41 |
+
BUSINESS PHONE: 2145081796
|
| 42 |
+
|
| 43 |
+
MAIL ADDRESS:
|
| 44 |
+
STREET 1: P O BOX 831402
|
| 45 |
+
CITY: DALLAS
|
| 46 |
+
STATE: TX
|
| 47 |
+
ZIP: 75283-1402
|
| 48 |
+
</SEC-HEADER>
|
| 49 |
+
<DOCUMENT>
|
| 50 |
+
<TYPE>10-K405
|
| 51 |
+
<SEQUENCE>1
|
| 52 |
+
<FILENAME>d95431e10-k405.txt
|
| 53 |
+
<DESCRIPTION>FORM 10-K FOR FISCAL YEAR END DECEMBER 31, 2001
|
| 54 |
+
<TEXT>
|
| 55 |
+
<PAGE>
|
| 56 |
+
================================================================================
|
| 57 |
+
|
| 58 |
+
SECURITIES AND EXCHANGE COMMISSION
|
| 59 |
+
Washington, D.C. 20549
|
| 60 |
+
|
| 61 |
+
----------------
|
| 62 |
+
|
| 63 |
+
FORM 10-K
|
| 64 |
+
|
| 65 |
+
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
|
| 66 |
+
OF THE SECURITIES EXCHANGE ACT OF 1934
|
| 67 |
+
For the Fiscal Year Ended December 31, 2001
|
| 68 |
+
|
| 69 |
+
OR
|
| 70 |
+
|
| 71 |
+
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
|
| 72 |
+
OF THE SECURITIES EXCHANGE ACT OF 1934
|
| 73 |
+
For the Transition period from ________ to ________ .
|
| 74 |
+
|
| 75 |
+
COMMISSION FILE NUMBER 0-8677
|
| 76 |
+
|
| 77 |
+
TIDELANDS ROYALTY TRUST "B"
|
| 78 |
+
(Exact name of registrant as specified in its charter)
|
| 79 |
+
|
| 80 |
+
TEXAS 75-6007863
|
| 81 |
+
(State or other jurisdiction (I.R.S. Employer
|
| 82 |
+
of incorporation or organization) Identification No.)
|
| 83 |
+
|
| 84 |
+
C/O THE CORPORATE TRUSTEE
|
| 85 |
+
BANK OF AMERICA, N.A. 75283-0241
|
| 86 |
+
P.O. BOX 830241, DALLAS, TEXAS (Zip Code)
|
| 87 |
+
(Address of principal executive offices)
|
| 88 |
+
|
| 89 |
+
Registrant's telephone number, including area code (800) 985-0794
|
| 90 |
+
|
| 91 |
+
Securities registered pursuant to Section 12(b) of the Act: None
|
| 92 |
+
|
| 93 |
+
Securities registered pursuant to Section 12(g) of the Act:
|
| 94 |
+
Units of Beneficial Interest
|
| 95 |
+
|
| 96 |
+
-------------------
|
| 97 |
+
|
| 98 |
+
Indicate by check mark whether the registrant (1) has filed all reports
|
| 99 |
+
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
|
| 100 |
+
1934 during the preceding 12 months (or for such shorter period that the
|
| 101 |
+
registrant was required to file such reports), and (2) has been subject to such
|
| 102 |
+
filing requirements for the past 90 days.
|
| 103 |
+
|
| 104 |
+
Yes X No
|
| 105 |
+
--- ---
|
| 106 |
+
|
| 107 |
+
Indicate by check mark if disclosure of delinquent filers pursuant to
|
| 108 |
+
Item 405 of Regulation S-K is not contained herein, and will not be contained,
|
| 109 |
+
to the best of registrant's knowledge, in definitive proxy or information
|
| 110 |
+
statements incorporated by reference in Part III of this Form 10-K or any
|
| 111 |
+
amendment to this Form 10-K. [X]
|
| 112 |
+
|
| 113 |
+
Aggregate market value of the Units of Beneficial Interest held by
|
| 114 |
+
non-affiliates of the Registrant at February 22, 2002: $4,361,822.
|
| 115 |
+
|
| 116 |
+
Number of Units of Beneficial Interest outstanding as of December 31,
|
| 117 |
+
2001 - 1,386,375 Units.
|
| 118 |
+
|
| 119 |
+
Documents incorporated by reference: None.
|
| 120 |
+
|
| 121 |
+
================================================================================
|
| 122 |
+
<PAGE>
|
| 123 |
+
|
| 124 |
+
|
| 125 |
+
CROSS REFERENCE SHEET
|
| 126 |
+
|
| 127 |
+
This Form 10-K for the year ended December 31, 2001, of Tidelands
|
| 128 |
+
Royalty Trust "B" is not organized by conventional item numbers and headings
|
| 129 |
+
contemplated by Securities and Exchange Commission rules. This cross-reference
|
| 130 |
+
page is intended to indicate to the reader where (or under which headings)
|
| 131 |
+
information required under Form 10-K may be found herein.
|
| 132 |
+
|
| 133 |
+
<Table>
|
| 134 |
+
<Caption>
|
| 135 |
+
Form 10-K
|
| 136 |
+
Item Numbers Headings Herein
|
| 137 |
+
- ------------ ---------------
|
| 138 |
+
|
| 139 |
+
<S> <C> <C>
|
| 140 |
+
PART I General
|
| 141 |
+
|
| 142 |
+
Item 1. Business........................................................ The Trust, Properties
|
| 143 |
+
|
| 144 |
+
Item 2. Properties...................................................... Properties
|
| 145 |
+
|
| 146 |
+
Item 3. Legal Proceedings............................................... Legal Matters
|
| 147 |
+
|
| 148 |
+
Item 4. Submission of Matters to a Vote of Security Holders............. Unitholder Voting Matters
|
| 149 |
+
|
| 150 |
+
PART II Financial
|
| 151 |
+
|
| 152 |
+
Item 5. Market for Registrant's Common Equity and Related
|
| 153 |
+
Stockholder Matters........................................... Market and Investor Information
|
| 154 |
+
|
| 155 |
+
Item 6. Selected Financial Data......................................... Selected Financial Data
|
| 156 |
+
|
| 157 |
+
Item 7. Management's Discussion and Analysis of Financial
|
| 158 |
+
Condition and Results of Operations........................... Management's Discussion and
|
| 159 |
+
Analysis of Financial Condition and
|
| 160 |
+
Results of Operations
|
| 161 |
+
|
| 162 |
+
Item 7A. Quantitative and Qualitative Disclosures About Market Risk...... Quantitative and Qualitative
|
| 163 |
+
Disclosure about Market Risk
|
| 164 |
+
|
| 165 |
+
Item 8. Financial Statements and Supplementary Data..................... Financial Statements and
|
| 166 |
+
Supplementary Data
|
| 167 |
+
|
| 168 |
+
Item 9. Disagreements on Accounting and Financial Disclosure............ Accounting Matters
|
| 169 |
+
|
| 170 |
+
PART III Management and Principal Unitholders
|
| 171 |
+
|
| 172 |
+
Item 10. Directors and Executive Officers of the Registrant.............. Administrators
|
| 173 |
+
|
| 174 |
+
Item 11. Executive Compensation.......................................... Management Compensation
|
| 175 |
+
|
| 176 |
+
Item 12. Security Ownership of Certain Beneficial Owners
|
| 177 |
+
and Management................................................ Principal Unitholders
|
| 178 |
+
|
| 179 |
+
Item 13. Certain Relationships and Related Transactions.................. Management Compensation
|
| 180 |
+
|
| 181 |
+
PART IV Miscellaneous
|
| 182 |
+
|
| 183 |
+
Item 14. Exhibits, Financial Statement Schedules, and
|
| 184 |
+
Reports on Form 8-K........................................... Exhibits, Financial Statement Schedules,
|
| 185 |
+
and Reports on Form 8-K
|
| 186 |
+
</Table>
|
| 187 |
+
|
| 188 |
+
|
| 189 |
+
|
| 190 |
+
2
|
| 191 |
+
<PAGE>
|
| 192 |
+
|
| 193 |
+
|
| 194 |
+
GENERAL
|
| 195 |
+
|
| 196 |
+
THE TRUST
|
| 197 |
+
|
| 198 |
+
Organization. Tidelands Royalty Trust "B" ("Tidelands") is a royalty
|
| 199 |
+
trust that was created on June 1, 1954, under the laws of the State of Texas.
|
| 200 |
+
Tidelands is not permitted to engage in any business activity because it was
|
| 201 |
+
organized for the sole purpose of providing an efficient, orderly, and practical
|
| 202 |
+
means for the administration and liquidation of rights to interests in any oil,
|
| 203 |
+
natural gas or other mineral leases obtained by Gulf Oil Corporation ("Gulf") in
|
| 204 |
+
a designated area of the Gulf of Mexico. These rights are evidenced by a
|
| 205 |
+
contract between Tidelands' predecessors and Gulf dated April 30, 1951 (the
|
| 206 |
+
"1951 Contract"), which is binding upon the assignees of Gulf. As a result of
|
| 207 |
+
various transactions that have occurred since 1951, the Gulf interests that were
|
| 208 |
+
subject to the 1951 Contract now are held by Chevron Corporation ("Chevron"),
|
| 209 |
+
Elf Acquitane, Inc. ("Elf"), and their assignees.
|
| 210 |
+
|
| 211 |
+
The Tidelands Royalty Trust "B" Indenture, effective June 1, 1954, as
|
| 212 |
+
amended (the "Indenture"), provides that the corporate trustee is to distribute
|
| 213 |
+
all cash in Tidelands, less an amount reserved for the payment of accrued
|
| 214 |
+
liabilities and estimated future expenses, to unitholders of record on the last
|
| 215 |
+
business day of March, June, September, and December of each year. Pursuant to
|
| 216 |
+
the terms of the Indenture, all distributions will be sent within 15 calendar
|
| 217 |
+
days of the record date. Bank of America, N.A. serves as corporate trustee.
|
| 218 |
+
|
| 219 |
+
The Indenture as amended provides that the term of the royalty trust
|
| 220 |
+
created to hold the rights under the 1951 Contract will expire on April 30,
|
| 221 |
+
2021, unless extended by the vote of the holders of a majority of the
|
| 222 |
+
outstanding units of beneficial interest.
|
| 223 |
+
|
| 224 |
+
Tidelands' wholly-owned subsidiary, Tidelands Royalty "B" Corporation
|
| 225 |
+
("Tidelands Corporation"), holds title to interests in properties subject to the
|
| 226 |
+
1951 Contract that are situated offshore of Louisiana. Ninety-five percent of
|
| 227 |
+
all oil, natural gas, and other mineral royalties collected by this subsidiary
|
| 228 |
+
are paid to Tidelands. Tidelands Corporation, like Tidelands, is prohibited from
|
| 229 |
+
engaging in a trade or business and does only those things necessary for the
|
| 230 |
+
administration and liquidation of its properties.
|
| 231 |
+
|
| 232 |
+
Tidelands' only industry segment or purpose is the administration and
|
| 233 |
+
collection of royalties.
|
| 234 |
+
|
| 235 |
+
The Contract. The 1951 Contract identifies 60 specific tracts in the
|
| 236 |
+
Gulf of Mexico. These tracts are not all the same size and collectively contain
|
| 237 |
+
approximately 1,370,000 acres (sometimes referred to herein as the "Royalty
|
| 238 |
+
Area"). Prior to the expiration of the 50-year lease acquisition period on April
|
| 239 |
+
30, 2001 (the "Acquisition Expiration Date"), if Chevron, Elf or their assigns
|
| 240 |
+
had acquired a lease or leases on one of the 60 tracts and if oil or natural gas
|
| 241 |
+
were produced and sold from any such tract, then Chevron, Elf or their assigns
|
| 242 |
+
had to make production payments to Tidelands, in an amount equal to
|
| 243 |
+
approximately 12.5% of the value at the wellhead of the oil and natural gas
|
| 244 |
+
subject to such lease until the sum of $1,500,000 has been paid under the lease.
|
| 245 |
+
Thereafter, Tidelands' interest in such tract was converted to an overriding
|
| 246 |
+
royalty and Tidelands received payments equal to approximately 4.17% of the
|
| 247 |
+
value of the oil and natural gas sold as long as the lease on such tract
|
| 248 |
+
existed.
|
| 249 |
+
|
| 250 |
+
Tidelands has seven assigned leases. At December 31, 2001, six of
|
| 251 |
+
Tidelands' assigned leases contained producing wells and had paid out their
|
| 252 |
+
$1,500,000 production payments. Tidelands' royalty interest on five of the six
|
| 253 |
+
leases is 4.17%. On the sixth lease the overriding royalty is 1.0416%. One
|
| 254 |
+
recently acquired and assigned lease does not contain any producing wells. This
|
| 255 |
+
lease has not yet paid $1,500,000 in production payments. Tidelands' royalty
|
| 256 |
+
interest on this lease is 12.5%.
|
| 257 |
+
|
| 258 |
+
Since the Acquisition Expiration Date, Chevron, Elf and their assignees
|
| 259 |
+
are no longer obligated to assign an interest to the Trust out of any lease that
|
| 260 |
+
was acquired after that date. Tidelands will continue to receive payments on the
|
| 261 |
+
leases acquired by Chevron, Elf or their assignees prior to the Acquisition
|
| 262 |
+
Expiration Date.
|
| 263 |
+
|
| 264 |
+
In 2001, approximately 23% of Tidelands' royalty revenues were
|
| 265 |
+
attributable to oil and approximately 77% were attributable to natural gas. The
|
| 266 |
+
production payments and royalty revenues received by Tidelands are affected by
|
| 267 |
+
seasonal fluctuations in demand and by changes in the market price for oil and
|
| 268 |
+
natural gas. During 2001, Tidelands received royalty payments from six working
|
| 269 |
+
interest owners. The following table shows the percentage received each year for
|
| 270 |
+
the past 3 years from those working interest owners:
|
| 271 |
+
|
| 272 |
+
|
| 273 |
+
|
| 274 |
+
3
|
| 275 |
+
<PAGE>
|
| 276 |
+
<Table>
|
| 277 |
+
<Caption>
|
| 278 |
+
COMPANY 2001 2000 1999
|
| 279 |
+
- ------------------------------------------------------------------ ------------- -------------- -------------
|
| 280 |
+
|
| 281 |
+
<S> <C> <C> <C>
|
| 282 |
+
Devon Energy Production Company................................... 68% 68% --
|
| 283 |
+
Burlington Resources.............................................. 12% 7% 6%
|
| 284 |
+
Millenium Offshore Group Inc...................................... 12% -- --
|
| 285 |
+
Petroquest Energy Inc............................................. 4% -- --
|
| 286 |
+
Dominion Exploration & Production Co.............................. 3% -- --
|
| 287 |
+
Forest Oil Corp................................................... 1% -- --
|
| 288 |
+
Chevron, USA...................................................... -- 1% 7%
|
| 289 |
+
Pennzenergy Exploration and Production Company.................... -- 21% 81%
|
| 290 |
+
</Table>
|
| 291 |
+
|
| 292 |
+
Tidelands derives no revenues from foreign sources and has no export
|
| 293 |
+
sales.
|
| 294 |
+
|
| 295 |
+
Trust Functions. Tidelands is administered by officers and employees of
|
| 296 |
+
its Trustee, Bank of America, N.A. and its principal accounting officer who
|
| 297 |
+
performs certain management, financial and administrative services for
|
| 298 |
+
Tidelands. See "Management and Principal Unitholders."
|
| 299 |
+
|
| 300 |
+
Important aspects of Tidelands' operations are conducted by third
|
| 301 |
+
parties. These include the production and sale of oil and natural gas and the
|
| 302 |
+
calculation of royalty payments to Tidelands, which are conducted by oil and
|
| 303 |
+
natural gas companies that lease tracts subject to Tidelands' interests.
|
| 304 |
+
Similarly, Tidelands' distributions are processed and paid by The Bank of New
|
| 305 |
+
York as the agent for the trustee of Tidelands.
|
| 306 |
+
|
| 307 |
+
Marine Petroleum Corporation, a wholly-owned subsidiary of Marine
|
| 308 |
+
Petroleum Trust ("Marine"), a 32.6% unitholder of Tidelands, leases office space
|
| 309 |
+
in Dallas, Texas to provide work space and record storage for Marine, Marine
|
| 310 |
+
Petroleum Corporation, Tidelands and Tidelands Corporation. The cost of this
|
| 311 |
+
office facility is shared by all four of these entities in proportion to each
|
| 312 |
+
entity's gross income to the total of such income of all entities.
|
| 313 |
+
|
| 314 |
+
The ability of Tidelands to receive revenues is entirely dependent upon
|
| 315 |
+
its entitlement to its rights with respect to the leases held by Chevron, Elf
|
| 316 |
+
and their assignees in the Gulf of Mexico (as more fully described in
|
| 317 |
+
"Properties" below). Moreover, no revenues are payable to Tidelands until sales
|
| 318 |
+
of production commence from any such lease.
|
| 319 |
+
|
| 320 |
+
The royalty interests held by Tidelands are depleting with each barrel
|
| 321 |
+
of oil and mcf of natural gas produced. No funds are reinvested by Tidelands;
|
| 322 |
+
thus, these depleting assets are not being replaced.
|
| 323 |
+
|
| 324 |
+
|
| 325 |
+
|
| 326 |
+
4
|
| 327 |
+
<PAGE>
|
| 328 |
+
|
| 329 |
+
PROPERTIES
|
| 330 |
+
|
| 331 |
+
General. Tidelands is not engaged in oil and natural gas operations.
|
| 332 |
+
Its income is based on oil and natural gas operations of others.
|
| 333 |
+
Tidelands' income is derived from contracts that provide for payments in the
|
| 334 |
+
nature of overriding royalty payments made to Tidelands based on oil and natural
|
| 335 |
+
gas sales from certain leases in the Gulf of Mexico. Tidelands does not own or
|
| 336 |
+
directly lease any physical properties.
|
| 337 |
+
|
| 338 |
+
Reserves. Tidelands is not engaged in the production of oil or natural
|
| 339 |
+
gas. Tidelands' income is derived from overriding royalty payments that are
|
| 340 |
+
carved out of working interests in oil and natural gas leases in the Gulf of
|
| 341 |
+
Mexico. Tidelands does not have the engineering data necessary to make an
|
| 342 |
+
estimate of the proved oil and natural gas reserves attributable thereto (nor
|
| 343 |
+
the present value of future net cash flows from such reserves), and is not
|
| 344 |
+
entitled to receive such data from the owners of the working interests from
|
| 345 |
+
which Tidelands' interests are derived. See also "Difficulty in Obtaining
|
| 346 |
+
Certain Data" below.
|
| 347 |
+
|
| 348 |
+
Since Tidelands does not have access to this reserve information,
|
| 349 |
+
Tidelands is unable to compute the standardized measure of discounted future net
|
| 350 |
+
cash flows therefrom.
|
| 351 |
+
|
| 352 |
+
No reports on oil and natural gas reserves were filed with any federal
|
| 353 |
+
authority or agency during 2001 by Tidelands.
|
| 354 |
+
|
| 355 |
+
Production. Information regarding the net quantities of oil and natural
|
| 356 |
+
gas produced with respect to Tidelands' overriding royalty interests for each of
|
| 357 |
+
the last three fiscal years, as well as the average sales price per unit of oil
|
| 358 |
+
and natural gas produced upon which payments to Tidelands are based, is set
|
| 359 |
+
forth below in the following table:
|
| 360 |
+
|
| 361 |
+
<Table>
|
| 362 |
+
<Caption>
|
| 363 |
+
2001 2000 1999
|
| 364 |
+
------------- -------------- -------------
|
| 365 |
+
|
| 366 |
+
<S> <C> <C> <C>
|
| 367 |
+
Quantity of royalty oil and natural gas sold:
|
| 368 |
+
Oil (in barrels ("bbls"))........................... 10,625 12,497 12,810
|
| 369 |
+
|
| 370 |
+
Natural gas (in thousand cubic feet ("mcf"))........ 201,284 256,706 319,858
|
| 371 |
+
|
| 372 |
+
Weighted average sales price for royalty oil and
|
| 373 |
+
natural gas sold:
|
| 374 |
+
Oil (per bbl)(1).................................... $ 24.72 $ 30.39 $ 14.73
|
| 375 |
+
|
| 376 |
+
Natural gas (per mcf)(1)............................ $ 4.49 $ 4.67 $ 2.87
|
| 377 |
+
|
| 378 |
+
</Table>
|
| 379 |
+
|
| 380 |
+
- ----------
|
| 381 |
+
|
| 382 |
+
(1) The weighted average sales price is based on the market value at the well as
|
| 383 |
+
determined by the operators.
|
| 384 |
+
|
| 385 |
+
Information about average production cost (lifting cost) per unit of
|
| 386 |
+
production has been omitted due to its unavailability and inapplicability to
|
| 387 |
+
Tidelands. For more recent information regarding crude oil sales prices, see
|
| 388 |
+
"Management's Discussion and Analysis of Financial Condition and Results of
|
| 389 |
+
Operations" below.
|
| 390 |
+
|
| 391 |
+
Interests in Properties. Tidelands' properties consist of production
|
| 392 |
+
payments and overriding royalty interests in 7 oil and natural gas leases
|
| 393 |
+
covering 29,812 gross acres in the 1,370,000 acre Royalty Area. These leases are
|
| 394 |
+
located in the Gulf of Mexico in the Galveston, High Island, Sabine Pass and
|
| 395 |
+
West Cameron areas.
|
| 396 |
+
|
| 397 |
+
Productive Properties. Set forth in the table below is certain
|
| 398 |
+
information as of July 31, 2001, concerning gross productive oil and natural gas
|
| 399 |
+
wells and gross leased acres in which Tidelands owns its interests:
|
| 400 |
+
|
| 401 |
+
<Table>
|
| 402 |
+
<S> <C>
|
| 403 |
+
GROSS PRODUCTIVE WELLS:
|
| 404 |
+
Oil................................................................. 3
|
| 405 |
+
------
|
| 406 |
+
Natural Gas......................................................... 8
|
| 407 |
+
------
|
| 408 |
+
GROSS LEASED ACRES:
|
| 409 |
+
Productive.......................................................... 29,812
|
| 410 |
+
======
|
| 411 |
+
</Table>
|
| 412 |
+
|
| 413 |
+
Information regarding net wells or acres is not included since
|
| 414 |
+
Tidelands does not own any working interests.
|
| 415 |
+
|
| 416 |
+
|
| 417 |
+
|
| 418 |
+
5
|
| 419 |
+
<PAGE>
|
| 420 |
+
The following table contains information about the average daily
|
| 421 |
+
production attributable to Tidelands' interest, by field, for the six months
|
| 422 |
+
ended July 31, 2000 and 1999. The information for 2001 is the average daily
|
| 423 |
+
production for the month July 2001 and is the most recent production information
|
| 424 |
+
available to Tidelands from the Petroleum Information Corporation for the year
|
| 425 |
+
2001.
|
| 426 |
+
|
| 427 |
+
<Table>
|
| 428 |
+
<Caption>
|
| 429 |
+
NET Mcf OIL & NATURAL GAS
|
| 430 |
+
EQUIVALENT PER DAY (1)
|
| 431 |
+
--------------------------------------------
|
| 432 |
+
ONE MONTH SIX MONTHS
|
| 433 |
+
ENDED ENDED
|
| 434 |
+
JULY 31, JULY 31,
|
| 435 |
+
YEAR FIRST ------------ -----------------------------
|
| 436 |
+
FIELD PRODUCED 2001 2000 1999
|
| 437 |
+
- ----------------------------------------------------- ------------- ------------ ------------- ------------
|
| 438 |
+
|
| 439 |
+
<S> <C> <C> <C> <C>
|
| 440 |
+
OFFSHORE TEXAS
|
| 441 |
+
Galveston Block 303.............................. 1987 195 55 117
|
| 442 |
+
High Island Block 128............................ 1989 40 119 51
|
| 443 |
+
OFFSHORE LOUISIANA
|
| 444 |
+
Sabine Pass Block 13............................. 1981 187 198 193
|
| 445 |
+
West Cameron Block 165........................... 1969 227 613 751
|
| 446 |
+
West Cameron Block 225........................... 1969 64 12 12
|
| 447 |
+
</Table>
|
| 448 |
+
|
| 449 |
+
- ----------
|
| 450 |
+
|
| 451 |
+
(1) Net oil production is reflected in the amount of its mcf equivalent of
|
| 452 |
+
natural gas on a btu basis (6 to 1).
|
| 453 |
+
|
| 454 |
+
Present Activities. Tidelands currently receives royalties from oil and
|
| 455 |
+
natural gas sold from six leases in the Royalty Area, although delivery
|
| 456 |
+
quantities are subject to seasonal demand.
|
| 457 |
+
|
| 458 |
+
Tidelands is not obligated to provide any fixed and determinable
|
| 459 |
+
quantities of oil or natural gas in the future under any existing contracts or
|
| 460 |
+
agreements. Tidelands understands from public records that no activity is being
|
| 461 |
+
undertaken with respect to drilling or workover operations on the six leases
|
| 462 |
+
from which it receives royalties.
|
| 463 |
+
|
| 464 |
+
Difficulty in Obtaining Certain Data. Tidelands' only activities are
|
| 465 |
+
the collection and distribution of revenues from overriding royalties on certain
|
| 466 |
+
oil and natural gas leases in the Gulf of Mexico, pursuant to purchase
|
| 467 |
+
agreements between Tidelands' predecessors and Gulf and its transferees. The
|
| 468 |
+
leasehold working interests that are subject to the rights held by Tidelands are
|
| 469 |
+
owned, in most cases, in whole or in part by Chevron, or other oil and natural
|
| 470 |
+
gas exploration and production companies. Certain information as to reserves,
|
| 471 |
+
availability of oil and natural gas, average production cost (lifting cost) per
|
| 472 |
+
unit, undeveloped acreage, net wells and net acres, etc., with respect to the
|
| 473 |
+
particular leases subject to Tidelands' interests lies solely within the
|
| 474 |
+
knowledge of these concerns. Engineering data, if any, regarding these
|
| 475 |
+
leaseholds would have been compiled principally by or for the working interest
|
| 476 |
+
owners of these leaseholders and Tidelands believes that it will not be provided
|
| 477 |
+
access to such information. Because of this, it appears that unreasonable
|
| 478 |
+
efforts and expense would be involved in seeking to obtain all of the
|
| 479 |
+
information required under Item 102 of Regulation S-K and Securities Exchange
|
| 480 |
+
Act of 1934 Industry Guide 2.
|
| 481 |
+
|
| 482 |
+
|
| 483 |
+
|
| 484 |
+
6
|
| 485 |
+
<PAGE>
|
| 486 |
+
|
| 487 |
+
LEGAL MATTERS
|
| 488 |
+
|
| 489 |
+
Neither Tidelands nor Tidelands Corporation, nor any of their
|
| 490 |
+
respective properties, is a party to or subject to any material pending
|
| 491 |
+
litigation as of the date hereof.
|
| 492 |
+
|
| 493 |
+
UNITHOLDER VOTING MATTERS
|
| 494 |
+
|
| 495 |
+
During the last quarter of 2001, no matters were presented to the
|
| 496 |
+
unitholders for a vote.
|
| 497 |
+
|
| 498 |
+
|
| 499 |
+
|
| 500 |
+
7
|
| 501 |
+
<PAGE>
|
| 502 |
+
|
| 503 |
+
FINANCIAL
|
| 504 |
+
|
| 505 |
+
MARKET AND INVESTOR INFORMATION
|
| 506 |
+
|
| 507 |
+
Tidelands is authorized to issue 1,386,525 units of beneficial
|
| 508 |
+
interest; 1,386,375 units were held by 396 unitholders of record as of February
|
| 509 |
+
8, 2002. The remaining 150 units are reserved to be issued to specific parties
|
| 510 |
+
if and when they decide to transfer their rights under the 1951 Contract to
|
| 511 |
+
Tidelands. There were no changes in the number of outstanding units of
|
| 512 |
+
beneficial interest during 2001.
|
| 513 |
+
|
| 514 |
+
The units of beneficial interest in Tidelands trade in the
|
| 515 |
+
over-the-counter market and are listed in the NASD's Bulletin Board under the
|
| 516 |
+
symbol "TIRTZ." There is limited trading in Tidelands' units of beneficial
|
| 517 |
+
interest. The following table presents information obtained from the National
|
| 518 |
+
Quotation Bureau, Inc. as to the high and low bid prices and includes
|
| 519 |
+
distributions to unitholders, by quarter, for the past two years:
|
| 520 |
+
|
| 521 |
+
<Table>
|
| 522 |
+
<Caption>
|
| 523 |
+
BID QUOTATION
|
| 524 |
+
------------------------------- DISTRIBUTIONS
|
| 525 |
+
YEAR ENDED DECEMBER 31, HIGH LOW (PER UNIT)
|
| 526 |
+
- --------------------------------------------------------------------- -------------- ------------- ---------------
|
| 527 |
+
<S> <C> <C> <C>
|
| 528 |
+
2001
|
| 529 |
+
First quarter.................................................... $ 5.13 $ 3.94 $ .30
|
| 530 |
+
Second quarter................................................... 6.05 5.00 .35
|
| 531 |
+
Third quarter.................................................... 6.00 4.60 .20
|
| 532 |
+
Fourth quarter................................................... 6.11 5.10 .11
|
| 533 |
+
|
| 534 |
+
2000
|
| 535 |
+
First quarter.................................................... $ 4.50 $ 3.75 $ .13
|
| 536 |
+
Second quarter................................................... 4.75 4.00 .19
|
| 537 |
+
Third quarter.................................................... 4.25 3.63 .33
|
| 538 |
+
Fourth quarter................................................... 4.38 3.63 .22
|
| 539 |
+
</Table>
|
| 540 |
+
|
| 541 |
+
Such over-the-counter market quotations reflect interdealer prices
|
| 542 |
+
without retail mark-up, mark-down or commission and may not necessarily
|
| 543 |
+
represent actual transactions.
|
| 544 |
+
|
| 545 |
+
Tidelands must distribute to its unitholders all cash accumulated each
|
| 546 |
+
quarter, less an amount reserved for accrued liabilities and estimated future
|
| 547 |
+
expenses. Such distributions have been made since the third quarter of 1977 and
|
| 548 |
+
will continue so long as the income from oil and natural gas royalties exceeds
|
| 549 |
+
administrative costs.
|
| 550 |
+
|
| 551 |
+
The Securities and Exchange Commission has neither approved nor
|
| 552 |
+
disapproved Tidelands' Annual Report for its year ended December 31, 2001, nor
|
| 553 |
+
has it passed upon its accuracy or adequacy. While Tidelands' complete Form 10-K
|
| 554 |
+
(excluding exhibits) for the year ended December 31, 2001, is distributed to
|
| 555 |
+
unitholders, a copy of such Form 10-K (without exhibits) is available without
|
| 556 |
+
charge to interested parties. There will be copying and mailing charges for
|
| 557 |
+
copies of any exhibits requested. Written requests should be directed to Ms.
|
| 558 |
+
Cindy Stover Miller, Bank of America, N.A., P.O. Box 830241, Dallas, Texas
|
| 559 |
+
75283-0241.
|
| 560 |
+
|
| 561 |
+
SELECTED FINANCIAL DATA
|
| 562 |
+
|
| 563 |
+
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
|
| 564 |
+
|
| 565 |
+
<Table>
|
| 566 |
+
<Caption>
|
| 567 |
+
2001 2000 1999 1998 1997
|
| 568 |
+
------- ------- ------- ------- -------
|
| 569 |
+
|
| 570 |
+
<S> <C> <C> <C> <C> <C>
|
| 571 |
+
Income - oil and natural gas royalties ...... $ 1,166 $ 1,580 $ 1,108 $ 1,228 $ 1,263
|
| 572 |
+
|
| 573 |
+
Net income .................................. $ 1,092 $ 1,532 $ 1,071 $ 1,193 $ 1,235
|
| 574 |
+
|
| 575 |
+
Net income per unit ......................... $ .79 $ 1.11 $ .77 $ .86 $ .89
|
| 576 |
+
|
| 577 |
+
Distributions to unitholders ................ $ 1,332 $ 1,213 $ 1,028 $ 1,104 $ 1,166
|
| 578 |
+
|
| 579 |
+
Distributions per unit ...................... $ .96 $ .87 $ .74 $ .80 $ .84
|
| 580 |
+
|
| 581 |
+
Total assets ................................ $ 1,299 $ 1,688 $ 1,560 $ 1,646 $ 2,421
|
| 582 |
+
</Table>
|
| 583 |
+
|
| 584 |
+
|
| 585 |
+
|
| 586 |
+
8
|
| 587 |
+
<PAGE>
|
| 588 |
+
|
| 589 |
+
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
|
| 590 |
+
CONDITION AND RESULTS OF OPERATIONS
|
| 591 |
+
|
| 592 |
+
Capital Resources and Liquidity. Because of the nature of Tidelands as
|
| 593 |
+
a trust entity, there is no requirement for capital; its only obligation is to
|
| 594 |
+
distribute to unitholders the net income actually collected. As an administrator
|
| 595 |
+
of oil and natural gas royalty properties, Tidelands collects income monthly,
|
| 596 |
+
pays expenses of administration, and disburses all net income collected to its
|
| 597 |
+
unitholders each quarter. Because all of Tidelands' revenues are invested in
|
| 598 |
+
liquid funds pending distribution, Tidelands does not experience liquidity
|
| 599 |
+
problems.
|
| 600 |
+
|
| 601 |
+
Tidelands' Indenture (and the charter and by-laws of Tidelands
|
| 602 |
+
Corporation) expressly prohibits the operation of any kind of trade or business.
|
| 603 |
+
Tidelands' oil and natural gas properties are depleting assets and are not being
|
| 604 |
+
replaced due to the prohibition against these investments. Because of these
|
| 605 |
+
restrictions, Tidelands does not require short term or long term capital. These
|
| 606 |
+
restrictions, along with other factors, allow Tidelands to be treated as a
|
| 607 |
+
grantor trust; thus all income and deductions, for tax purposes, should flow
|
| 608 |
+
through to each individual unitholder. Tidelands is not a taxable entity.
|
| 609 |
+
|
| 610 |
+
Results of Operations. Tidelands' revenues are derived from the oil and
|
| 611 |
+
natural gas production activities of unrelated parties. Tidelands' revenues and
|
| 612 |
+
distributions fluctuate from period to period based upon factors beyond
|
| 613 |
+
Tidelands' control, including without limitation the number of leases subject to
|
| 614 |
+
Tidelands' interests, the number of productive wells drilled on leases subject
|
| 615 |
+
to Tidelands' interests, the level of production over time from such wells and
|
| 616 |
+
the prices at which the oil and natural gas from such wells are sold. Tidelands
|
| 617 |
+
believes that it will continue to have revenues sufficient to permit
|
| 618 |
+
distributions to be made to unitholders for the foreseeable future, although no
|
| 619 |
+
assurance can be made regarding the amounts thereof. The foregoing sentence is a
|
| 620 |
+
forward-looking statement. Factors that might cause actual results to differ
|
| 621 |
+
from expected results include reductions in prices or demand for oil and natural
|
| 622 |
+
gas, which might then lead to decreased production; reductions in production due
|
| 623 |
+
to depletion of existing wells or disruptions in service, including as the
|
| 624 |
+
result of storm damage, blowouts or other production accidents, and geological
|
| 625 |
+
changes such as cratering of productive formations; expiration or release of
|
| 626 |
+
leases subject to Tidelands' interests.
|
| 627 |
+
|
| 628 |
+
Tidelands' income consists primarily of oil and natural gas royalties
|
| 629 |
+
and is based on the value at the well of Tidelands' percentage interest in
|
| 630 |
+
oil and natural gas sold without reduction for production expenses. Value at the
|
| 631 |
+
well for oil is the purchasers' posted price at its receiving point onshore,
|
| 632 |
+
less the cost of transportation from the offshore lease to the onshore receiving
|
| 633 |
+
point. In general, value at the well is determined on the basis of the selling
|
| 634 |
+
price of oil, natural gas and other minerals produced, saved and sold, or at
|
| 635 |
+
wellhead prices determined by industry standards, where the selling price does
|
| 636 |
+
not reflect value at the well. In the event an agreement is not arms-length in
|
| 637 |
+
nature, the value is based upon current market prices.
|
| 638 |
+
|
| 639 |
+
Summary Review. Tidelands' net income in 2001 amounted to $1,092,273 or
|
| 640 |
+
$.79 per unit as compared to $1,532,381 or $1.11 per unit in 2000 and $1,070,861
|
| 641 |
+
or $.77 per unit in 1999. Distributions per unit were $.96 in 2001, $.87 in 2000
|
| 642 |
+
and $.74 in 1999.
|
| 643 |
+
|
| 644 |
+
Administrative expenses increased approximately $15,000 (16%) in 2001
|
| 645 |
+
due primarily to the cost of soliciting the unitholders vote to extend the life
|
| 646 |
+
of the trust.
|
| 647 |
+
|
| 648 |
+
Production of both oil and natural gas has declined over the past three
|
| 649 |
+
years while prices have fluctuated. The following table present the results of
|
| 650 |
+
these factors for the past three years:
|
| 651 |
+
|
| 652 |
+
|
| 653 |
+
|
| 654 |
+
9
|
| 655 |
+
<PAGE>
|
| 656 |
+
|
| 657 |
+
|
| 658 |
+
<Table>
|
| 659 |
+
<Caption>
|
| 660 |
+
2001 2000 1999
|
| 661 |
+
------------- -------------- -------------
|
| 662 |
+
|
| 663 |
+
<S> <C> <C> <C>
|
| 664 |
+
QUANTITY OF ROYALTY OIL AND NATURAL GAS SOLD:
|
| 665 |
+
Oil (bbls)........................................... 10,625 12,498 12,810
|
| 666 |
+
Natural gas (mcf).................................... 201,284 256,706 319,858
|
| 667 |
+
|
| 668 |
+
WEIGHTED AVERAGE SALES PRICE FOR ROYALTY OIL AND
|
| 669 |
+
NATURAL GAS SOLD:
|
| 670 |
+
Oil (per bbl)(1).................................... $ 24.72 $ 30.39 $ 14.73
|
| 671 |
+
Natural gas (per mcf)(1)........................... $ 4.49 $ 4.67 $ 2.87
|
| 672 |
+
</Table>
|
| 673 |
+
|
| 674 |
+
- ----------
|
| 675 |
+
|
| 676 |
+
(1) The weighted average sale price is based on the market value at the well as
|
| 677 |
+
determined by the operators.
|
| 678 |
+
|
| 679 |
+
Tidelands retains a funded reserve for possible royalty overpayments
|
| 680 |
+
received in various years from 1988 through 1993. As of December 31, 2001,
|
| 681 |
+
Tidelands retained a funded reserve of approximately $127,000 for possible
|
| 682 |
+
royalty overpayments in the future.
|
| 683 |
+
|
| 684 |
+
During the years ended December 31, 2000 and 1999, respectively,
|
| 685 |
+
Tidelands restored to income $251,534 and $258,902 of its contingency reserve
|
| 686 |
+
that management determined was no longer needed to cover refunds that may be
|
| 687 |
+
required upon redetermination of natural gas prices for royalty payments in
|
| 688 |
+
prior periods. Net income per unit was increased $.18 and $.19 in 2000 and 1999,
|
| 689 |
+
respectively by this decision.
|
| 690 |
+
|
| 691 |
+
The following table and related discussion and analysis shows the
|
| 692 |
+
royalty income, the net quantities sold, and the average price received for oil
|
| 693 |
+
and natural gas during the past three years excluding Tidelands' equity interest
|
| 694 |
+
in Marine and the $251,534 and $258,902 realized in fiscal 2000 and fiscal 1999,
|
| 695 |
+
respectively, from the reduction of the previously established accounts payable
|
| 696 |
+
for possible royalty over-payments that management no longer deemed required.
|
| 697 |
+
The following table presents comparative operating data which reflects these
|
| 698 |
+
underlying circumstances.
|
| 699 |
+
|
| 700 |
+
<Table>
|
| 701 |
+
<Caption>
|
| 702 |
+
FOR YEARS ENDED DECEMBER 31,
|
| 703 |
+
-------------------------------------------------
|
| 704 |
+
2001 2000 1999
|
| 705 |
+
-------------- ------------- --------------
|
| 706 |
+
<S> <C> <C> <C>
|
| 707 |
+
INCOME:
|
| 708 |
+
Oil royalties (1) .................. $ 262,623 $ 379,828 $ 188,643
|
| 709 |
+
Natural gas royalties .............. 903,587 1,200,083 919,376
|
| 710 |
+
----------- ----------- -----------
|
| 711 |
+
$ 1,166,210 $ 1,579,911 $ 1,108,019
|
| 712 |
+
NET PRODUCTION QUANTITIES:
|
| 713 |
+
Oil (bbls) ......................... 10,625 12,498 12,810
|
| 714 |
+
Natural gas (mcf) .................. 201,284 256,706 319,858
|
| 715 |
+
|
| 716 |
+
AVERAGE NET PRICES:
|
| 717 |
+
Oil (1) ............................ $ 24.72 $ 30.39 $ 14.73
|
| 718 |
+
Natural gas (2) .................... $ 4.49 $ 4.67 $ 2.87
|
| 719 |
+
</Table>
|
| 720 |
+
|
| 721 |
+
- ----------
|
| 722 |
+
|
| 723 |
+
(1) These amounts are net of the cost of transportation from offshore leases to
|
| 724 |
+
onshore receiving points.
|
| 725 |
+
|
| 726 |
+
(2) The average price in 2000 includes $.98 per mcf attributable to the $251,534
|
| 727 |
+
reserve reduction for that year. The average price in 1999 includes $.81 per
|
| 728 |
+
mcf attributable to the $258,902 reserve reduction for that year.
|
| 729 |
+
|
| 730 |
+
Oil and Natural Gas Royalties -- 2001 and 2000: During fiscal 2001,
|
| 731 |
+
Tidelands received approximately 23% of its royalty income from the sale of oil
|
| 732 |
+
and 77% from the sale of natural gas. Income from such oil and natural gas
|
| 733 |
+
royalties in fiscal 2001 decreased approximately 26% from fiscal 2000.
|
| 734 |
+
|
| 735 |
+
Revenue from oil royalties amounted to $262,623 in fiscal 2001, a
|
| 736 |
+
decrease of 31% as compared to the $379,838 realized in fiscal 2000. The average
|
| 737 |
+
price of a barrel of oil decreased 19% to $24.72 as compared to $30.39 for
|
| 738 |
+
fiscal 2000 and production decreased 15% to 10,625 barrels as compared to 12,498
|
| 739 |
+
barrels in fiscal 2000. Please refer to the table above.
|
| 740 |
+
|
| 741 |
+
Revenue from natural gas royalties amounted to $903,587, a decrease of
|
| 742 |
+
25% as compared to the $1,200,083 realized in fiscal 2000. The average price of
|
| 743 |
+
a thousand cubic feet (mcf) of natural gas decreased 4% to $4.49 as compared to
|
| 744 |
+
$4.67 for fiscal 2000 and production decreased 22% to 201,284 mcf as compared to
|
| 745 |
+
256,706 mcf in fiscal 2000. Please refer to the table above.
|
| 746 |
+
|
| 747 |
+
|
| 748 |
+
|
| 749 |
+
10
|
| 750 |
+
<PAGE>
|
| 751 |
+
|
| 752 |
+
Oil and Natural Gas Royalties -- 2000 and 1999: During fiscal 2000,
|
| 753 |
+
Tidelands received approximately 24% of its royalty income from the sale of oil
|
| 754 |
+
and 76% from the sale of natural gas. Income from such oil and natural gas
|
| 755 |
+
royalties in fiscal 2000 increased approximately 43% from fiscal 1999.
|
| 756 |
+
|
| 757 |
+
Oil royalties during fiscal 2000 in the amount of $379,828 were 101%
|
| 758 |
+
more than oil royalties received in fiscal 1999 in the amount of $188,643, due
|
| 759 |
+
to an increase in the average price received that was partially offset by a
|
| 760 |
+
decrease in the quantity of oil sold.
|
| 761 |
+
|
| 762 |
+
Natural gas royalties during fiscal 2000 in the amount of $1,200,083
|
| 763 |
+
were 31% higher than natural gas royalties received in fiscal 1999 in the amount
|
| 764 |
+
of $919,376. The increase was due to an increase in the price received that was
|
| 765 |
+
partially offset by a decrease in the quantity of natural gas sold.
|
| 766 |
+
|
| 767 |
+
|
| 768 |
+
|
| 769 |
+
11
|
| 770 |
+
<PAGE>
|
| 771 |
+
|
| 772 |
+
|
| 773 |
+
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
| 774 |
+
|
| 775 |
+
At December 31, 2001, Tidelands did not have any market risk exposure
|
| 776 |
+
with regard to any activities in derivative financial instruments, other
|
| 777 |
+
financial instruments and derivative commodity instruments.
|
| 778 |
+
|
| 779 |
+
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
| 780 |
+
|
| 781 |
+
Tidelands' consolidated financial statements listed in the following
|
| 782 |
+
index, together with the related notes and the report of KPMG LLP, independent
|
| 783 |
+
certified public accountants, are presented on pages 15 through 22 hereof:
|
| 784 |
+
|
| 785 |
+
<Table>
|
| 786 |
+
<Caption>
|
| 787 |
+
PAGE
|
| 788 |
+
----
|
| 789 |
+
|
| 790 |
+
<S> <C>
|
| 791 |
+
- -- Independent Auditors' Report........................................................................ 15
|
| 792 |
+
- -- Consolidated Balance Sheets as of December 31, 2001 and 2000........................................ 16
|
| 793 |
+
- -- Consolidated Statements of Income and Undistributed Income for the Three Years Ended December 31,
|
| 794 |
+
2001................................................................................................ 17
|
| 795 |
+
- -- Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2001................... 18
|
| 796 |
+
- -- Notes to Consolidated Financial Statements.......................................................... 19
|
| 797 |
+
</Table>
|
| 798 |
+
|
| 799 |
+
See also "Exhibits, Financial Statement Schedules and Reports on Form
|
| 800 |
+
8-K" of this Form 10-K for further information concerning the financial
|
| 801 |
+
statements of Tidelands and its subsidiaries.
|
| 802 |
+
|
| 803 |
+
All schedules have been omitted because they are not required or
|
| 804 |
+
because the required information is shown in the consolidated financial
|
| 805 |
+
statements or notes thereto.
|
| 806 |
+
|
| 807 |
+
ACCOUNTING MATTERS
|
| 808 |
+
|
| 809 |
+
During 2001 and 2000 there were no disagreements by Tidelands with its
|
| 810 |
+
principal accountants on any matter of accounting principles or practices or
|
| 811 |
+
financial statement disclosure.
|
| 812 |
+
|
| 813 |
+
|
| 814 |
+
|
| 815 |
+
12
|
| 816 |
+
|
| 817 |
+
<PAGE>
|
| 818 |
+
|
| 819 |
+
|
| 820 |
+
MANAGEMENT AND PRINCIPAL UNITHOLDERS
|
| 821 |
+
|
| 822 |
+
ADMINISTRATORS
|
| 823 |
+
|
| 824 |
+
Tidelands is a trust created under the laws of the State of Texas.
|
| 825 |
+
Tidelands' Indenture does not provide for directors or officers or the election
|
| 826 |
+
of directors or officers. Under the Indenture, Bank of America, N.A. serves as
|
| 827 |
+
Trustee.
|
| 828 |
+
|
| 829 |
+
R. Ray Bell may be considered a significant employee of Tidelands. Mr.
|
| 830 |
+
Bell has been involved in the administration of Tidelands since its inception.
|
| 831 |
+
He is 74 years old, and since July 1, 1977, Mr. Bell has been employed by Marine
|
| 832 |
+
Petroleum Corporation, a subsidiary of Marine, as president, vice president and
|
| 833 |
+
director. Mr. Bell will serve in such capacities until the next annual meeting
|
| 834 |
+
of directors of Marine Petroleum Corporation or until his successor is elected
|
| 835 |
+
and qualified. Mr. Bell acts as the principal accounting officer of Tidelands
|
| 836 |
+
for purposes of Tidelands' filings with the SEC.
|
| 837 |
+
|
| 838 |
+
MANAGEMENT COMPENSATION
|
| 839 |
+
|
| 840 |
+
During Tidelands' fiscal year ended December 31, 2001, Tidelands paid
|
| 841 |
+
or accrued fees of $19,713 to Bank of America, N.A., as corporate trustee.
|
| 842 |
+
During Tidelands' fiscal year ended December 31, 2001, Tidelands paid $17,042 to
|
| 843 |
+
Marine Petroleum Corporation as its share of certain administrative expenses.
|
| 844 |
+
These expenses are shared in the ratio of each of Tidelands' and Marine's gross
|
| 845 |
+
receipts to the total gross receipts of both trusts.
|
| 846 |
+
|
| 847 |
+
PRINCIPAL UNITHOLDERS
|
| 848 |
+
|
| 849 |
+
The following table sets forth the persons known to Tidelands who own
|
| 850 |
+
beneficially more than five percent of its outstanding units of beneficial
|
| 851 |
+
interest:
|
| 852 |
+
|
| 853 |
+
<Table>
|
| 854 |
+
<Caption>
|
| 855 |
+
AMOUNT BENEFICIALLY
|
| 856 |
+
NAME AND ADDRESS OF OWNED AS OF PERCENT
|
| 857 |
+
TITLE OF CLASS BENEFICIAL OWNER DECEMBER 31, 2001 OF CLASS
|
| 858 |
+
- ------------------------------- ------------------------------- --------------------------- ------------------
|
| 859 |
+
|
| 860 |
+
<S> <C> <C> <C>
|
| 861 |
+
Units of Beneficial Interest Marine Petroleum Trust 452,366 32.6%
|
| 862 |
+
P.O. Box 830241
|
| 863 |
+
Dallas, Texas 75283-0241
|
| 864 |
+
</Table>
|
| 865 |
+
|
| 866 |
+
There are no executive officers or directors of Tidelands. Bank of
|
| 867 |
+
America, N.A. does not beneficially own any units of beneficial interest.
|
| 868 |
+
|
| 869 |
+
|
| 870 |
+
|
| 871 |
+
13
|
| 872 |
+
<PAGE>
|
| 873 |
+
MISCELLANEOUS
|
| 874 |
+
|
| 875 |
+
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
|
| 876 |
+
|
| 877 |
+
|
| 878 |
+
(a) Financial Statements -- See "Financial Statements and Supplementary Data"
|
| 879 |
+
above.
|
| 880 |
+
|
| 881 |
+
The consolidated financial statements, together with the related notes
|
| 882 |
+
and the reports of KPMG LLP, independent certified public accountants, as
|
| 883 |
+
contained in the Form 10-K of Marine Petroleum Trust for its fiscal year ended
|
| 884 |
+
June 30, 2001 and filed with the Securities and Exchange Commission, are hereby
|
| 885 |
+
incorporated herein by reference for all purposes.
|
| 886 |
+
|
| 887 |
+
(b) Reports on Form 8-K -- No reports on Form 8-K have been filed during the
|
| 888 |
+
last quarter of the fiscal year ended December 31, 2001.
|
| 889 |
+
|
| 890 |
+
(c) Exhibits
|
| 891 |
+
|
| 892 |
+
3.1 Indenture of Trust dated June 1, 1954, as amended, filed as
|
| 893 |
+
an Exhibit to Tidelands' Quarterly Report on Form 10-Q for the
|
| 894 |
+
period ended September 30, 2001, filed with the Securities and
|
| 895 |
+
Exchange Commission on November 14, 2001, and incorporated
|
| 896 |
+
herein by reference.
|
| 897 |
+
|
| 898 |
+
21.1 Subsidiaries of Tidelands.
|
| 899 |
+
|
| 900 |
+
|
| 901 |
+
|
| 902 |
+
14
|
| 903 |
+
<PAGE>
|
| 904 |
+
|
| 905 |
+
INDEPENDENT AUDITORS' REPORT
|
| 906 |
+
|
| 907 |
+
The Trustee
|
| 908 |
+
Tidelands Royalty Trust "B":
|
| 909 |
+
|
| 910 |
+
We have audited the accompanying consolidated balance sheets of
|
| 911 |
+
Tidelands Royalty Trust "B" ("Tidelands") and subsidiary as of December 31, 2001
|
| 912 |
+
and 2000, and the related consolidated statements of income and undistributed
|
| 913 |
+
income and cash flows for each of the years in the three-year period ended
|
| 914 |
+
December 31, 2001. These consolidated financial statements are the
|
| 915 |
+
responsibility of Tidelands' management. Our responsibility is to express an
|
| 916 |
+
opinion on these consolidated financial statements based on our audits.
|
| 917 |
+
|
| 918 |
+
We conducted our audits in accordance with auditing standards generally
|
| 919 |
+
accepted in the United States of America. Those standards require that we plan
|
| 920 |
+
and perform the audit to obtain reasonable assurance about whether the financial
|
| 921 |
+
statements are free of material misstatement. An audit includes examining, on a
|
| 922 |
+
test basis, evidence supporting the amounts and disclosures in the financial
|
| 923 |
+
statements. An audit also includes assessing the accounting principles used and
|
| 924 |
+
significant estimates made by management, as well as evaluating the overall
|
| 925 |
+
financial statement presentation. We believe that our audits provide a
|
| 926 |
+
reasonable basis for our opinion.
|
| 927 |
+
|
| 928 |
+
In our opinion, the consolidated financial statements referred to above
|
| 929 |
+
present fairly, in all material respects, the financial position of Tidelands
|
| 930 |
+
Royalty Trust "B" and subsidiary as of December 31, 2001 and 2000 and the
|
| 931 |
+
results of their operations and their cash flows for each of the years in the
|
| 932 |
+
three-year period ended December 31, 2001, in conformity with accounting
|
| 933 |
+
principles generally accepted in the United States of America.
|
| 934 |
+
|
| 935 |
+
Dallas, Texas
|
| 936 |
+
January 29, 2002 /s/ KPMG LLP
|
| 937 |
+
|
| 938 |
+
|
| 939 |
+
|
| 940 |
+
15
|
| 941 |
+
<PAGE>
|
| 942 |
+
|
| 943 |
+
TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
|
| 944 |
+
|
| 945 |
+
CONSOLIDATED BALANCE SHEETS
|
| 946 |
+
DECEMBER 31, 2001 AND 2000
|
| 947 |
+
|
| 948 |
+
|
| 949 |
+
<Table>
|
| 950 |
+
<Caption>
|
| 951 |
+
2001 2000
|
| 952 |
+
----------- -----------
|
| 953 |
+
<S> <C> <C>
|
| 954 |
+
ASSETS
|
| 955 |
+
|
| 956 |
+
Current assets:
|
| 957 |
+
Cash and cash equivalents ................................... $ 1,165,980 $ 1,339,233
|
| 958 |
+
Oil and natural gas royalties receivable .................... 122,563 346,705
|
| 959 |
+
Federal income taxes receivable ............................. 10,520 2,450
|
| 960 |
+
----------- -----------
|
| 961 |
+
Total current assets .................................... 1,299,063 1,688,388
|
| 962 |
+
Oil, natural gas and other mineral properties ................... 2 2
|
| 963 |
+
----------- -----------
|
| 964 |
+
$ 1,299,065 $ 1,688,390
|
| 965 |
+
=========== ===========
|
| 966 |
+
|
| 967 |
+
LIABILITIES AND TRUST EQUITY
|
| 968 |
+
|
| 969 |
+
Current liabilities:
|
| 970 |
+
Accounts payable (note 3) ................................... $ 131,584 $ 131,885
|
| 971 |
+
Income distributable to unitholders ......................... 152,772 301,615
|
| 972 |
+
----------- -----------
|
| 973 |
+
Total current liabilities ............................... 284,356 433,500
|
| 974 |
+
----------- -----------
|
| 975 |
+
|
| 976 |
+
Trust equity:
|
| 977 |
+
Corpus - authorized 1,386,525 units of beneficial interest,
|
| 978 |
+
issued 1,386,375 units at nominal value ................. 2 2
|
| 979 |
+
Undistributed income (note 2) ............................... 1,014,707 1,254,888
|
| 980 |
+
----------- -----------
|
| 981 |
+
Total trust equity ...................................... 1,014,709 1,254,890
|
| 982 |
+
----------- -----------
|
| 983 |
+
$ 1,299,065 $ 1,688,390
|
| 984 |
+
=========== ===========
|
| 985 |
+
</Table>
|
| 986 |
+
|
| 987 |
+
|
| 988 |
+
See accompanying notes to consolidated financial statements.
|
| 989 |
+
|
| 990 |
+
|
| 991 |
+
|
| 992 |
+
16
|
| 993 |
+
<PAGE>
|
| 994 |
+
|
| 995 |
+
TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
|
| 996 |
+
|
| 997 |
+
CONSOLIDATED STATEMENTS OF INCOME AND UNDISTRIBUTED INCOME
|
| 998 |
+
THREE YEARS ENDED DECEMBER 31, 2001
|
| 999 |
+
|
| 1000 |
+
|
| 1001 |
+
<Table>
|
| 1002 |
+
<Caption>
|
| 1003 |
+
2001 2000 1999
|
| 1004 |
+
----------- ----------- -----------
|
| 1005 |
+
|
| 1006 |
+
<S> <C> <C> <C>
|
| 1007 |
+
Income:
|
| 1008 |
+
Oil and natural gas royalties ................ $ 1,166,210 $ 1,579,911 $ 1,108,019
|
| 1009 |
+
Interest and other ........................... 45,742 70,438 66,786
|
| 1010 |
+
----------- ----------- -----------
|
| 1011 |
+
Total income ............................. 1,211,952 1,650,349 1,174,805
|
| 1012 |
+
|
| 1013 |
+
Expenses:
|
| 1014 |
+
General and administrative ................... 107,650 93,140 87,144
|
| 1015 |
+
----------- ----------- -----------
|
| 1016 |
+
Income before federal income taxes ....... 1,104,302 1,557,209 1,087,661
|
| 1017 |
+
|
| 1018 |
+
Federal income taxes of subsidiary (note 1(e)) ... 12,029 24,828 16,800
|
| 1019 |
+
----------- ----------- -----------
|
| 1020 |
+
Net income ............................... 1,092,273 1,532,381 1,070,861
|
| 1021 |
+
|
| 1022 |
+
Undistributed income at beginning of year ........ 1,254,888 935,514 893,022
|
| 1023 |
+
----------- ----------- -----------
|
| 1024 |
+
2,347,161 2,467,895 1,963,883
|
| 1025 |
+
Distributions to unitholders ..................... 1,332,454 1,213,007 1,028,369
|
| 1026 |
+
----------- ----------- -----------
|
| 1027 |
+
Undistributed income at end of year .............. $ 1,014,707 $ 1,254,888 $ 935,514
|
| 1028 |
+
=========== =========== ===========
|
| 1029 |
+
Net income per unit .............................. $ .79 $ 1.11 $ .77
|
| 1030 |
+
=========== =========== ===========
|
| 1031 |
+
Distributions per unit ........................... $ .96 $ .87 $ .74
|
| 1032 |
+
=========== =========== ===========
|
| 1033 |
+
Weighted average units outstanding ............... 1,386,375 1,386,375 1,386,375
|
| 1034 |
+
=========== =========== ===========
|
| 1035 |
+
</Table>
|
| 1036 |
+
|
| 1037 |
+
|
| 1038 |
+
See accompanying notes to consolidated financial statements.
|
| 1039 |
+
|
| 1040 |
+
|
| 1041 |
+
|
| 1042 |
+
17
|
| 1043 |
+
<PAGE>
|
| 1044 |
+
|
| 1045 |
+
TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
|
| 1046 |
+
|
| 1047 |
+
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| 1048 |
+
THREE YEARS ENDED DECEMBER 31, 2001
|
| 1049 |
+
|
| 1050 |
+
<Table>
|
| 1051 |
+
<Caption>
|
| 1052 |
+
2001 2000 1999
|
| 1053 |
+
----------- ----------- -----------
|
| 1054 |
+
<S> <C> <C> <C>
|
| 1055 |
+
Cash flows from operating activities:
|
| 1056 |
+
Net income .............................................................. $ 1,092,273 $ 1,532,381 $ 1,070,861
|
| 1057 |
+
Adjustments to reconcile net income to net cash provided
|
| 1058 |
+
by operating activities:
|
| 1059 |
+
Change in assets and liabilities:
|
| 1060 |
+
Oil and natural gas royalties receivable ........................ 224,142 (250,615) 17,124
|
| 1061 |
+
Federal income taxes receivable ................................. (8,070) (2,450) 7,578
|
| 1062 |
+
Accounts payable ................................................ (301) (253,130) (260,552)
|
| 1063 |
+
Federal income tax payable ...................................... -- (211) 211
|
| 1064 |
+
----------- ----------- -----------
|
| 1065 |
+
Net cash provided by operating activities ................... 1,308,044 1,025,975 835,222
|
| 1066 |
+
Cash flows from financing activities - cash distributions
|
| 1067 |
+
to unitholders .......................................................... (1,481,297) (1,150,869) (896,226)
|
| 1068 |
+
----------- ----------- -----------
|
| 1069 |
+
Net increase (decrease) in cash and cash equivalents ........ (173,253) (124,894) (61,004)
|
| 1070 |
+
Cash and cash equivalents at beginning of year .............................. 1,339,233 1,464,127 1,525,131
|
| 1071 |
+
----------- ----------- -----------
|
| 1072 |
+
Cash and cash equivalents at end of year .................................... $ 1,165,980 $ 1,339,233 $ 1,464,127
|
| 1073 |
+
=========== =========== ===========
|
| 1074 |
+
</Table>
|
| 1075 |
+
|
| 1076 |
+
|
| 1077 |
+
See accompanying notes to consolidated financial statements.
|
| 1078 |
+
|
| 1079 |
+
|
| 1080 |
+
|
| 1081 |
+
18
|
| 1082 |
+
<PAGE>
|
| 1083 |
+
|
| 1084 |
+
TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
|
| 1085 |
+
|
| 1086 |
+
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
| 1087 |
+
DECEMBER 31, 2001
|
| 1088 |
+
|
| 1089 |
+
|
| 1090 |
+
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL
|
| 1091 |
+
|
| 1092 |
+
(a) General
|
| 1093 |
+
|
| 1094 |
+
Tidelands Royalty Trust "B" ("Tidelands") was established on June 1,
|
| 1095 |
+
1954 with a transfer of contract rights to certain properties to Tidelands in
|
| 1096 |
+
exchange for units of beneficial interest. The contract rights enable Tidelands
|
| 1097 |
+
to receive an interest in any oil, natural gas or other mineral leases obtained
|
| 1098 |
+
by Gulf Oil Corporation, now Chevron U.S.A., Inc. (Chevron) which is a
|
| 1099 |
+
subsidiary of Chevron Corporation, and its assignees in a designated area of the
|
| 1100 |
+
Gulf of Mexico during a 50-year period beginning April 30, 1951.
|
| 1101 |
+
|
| 1102 |
+
Tidelands is required under its indenture to distribute all income,
|
| 1103 |
+
after paying its liabilities and obligations, to the unitholders quarterly.
|
| 1104 |
+
Tidelands cannot invest any of its money for any purpose and cannot engage in a
|
| 1105 |
+
trade or business.
|
| 1106 |
+
|
| 1107 |
+
Tidelands' wholly-owned subsidiary, Tidelands Royalty "B" Corporation
|
| 1108 |
+
("Tidelands Corporation"), holds title to interests in properties that are
|
| 1109 |
+
situated offshore of Louisiana. Ninety-five percent of all oil, natural gas, and
|
| 1110 |
+
other mineral royalties collected by this subsidiary are paid to Tidelands.
|
| 1111 |
+
Tidelands Corporation, like Tidelands, is prohibited from engaging in a trade or
|
| 1112 |
+
business and does only those things necessary for the administration and
|
| 1113 |
+
liquidation of its properties. Tidelands is authorized to pay expenses of
|
| 1114 |
+
Tidelands Corporation should it be necessary.
|
| 1115 |
+
|
| 1116 |
+
Tidelands and its subsidiary have no employees. Tidelands has entered
|
| 1117 |
+
into an arrangement with Marine Petroleum Corporation (a wholly-owned subsidiary
|
| 1118 |
+
of Marine Petroleum Trust, an affiliate of Tidelands) to share certain
|
| 1119 |
+
administrative expenses. The sole purpose of this arrangement is to assist the
|
| 1120 |
+
trustees in the administration of the trusts. At December 31, 2001 and 2000,
|
| 1121 |
+
Marine Petroleum Trust owned 32.6% of Tidelands' outstanding units of beneficial
|
| 1122 |
+
interest.
|
| 1123 |
+
|
| 1124 |
+
(b) Unitholder Voting Matters
|
| 1125 |
+
|
| 1126 |
+
On March 27, 2001, the unitholders of record at the close of business
|
| 1127 |
+
on February 16, 2001, approved an amendment to the Indenture to extend the life
|
| 1128 |
+
of the trust beyond the original expiration date of April 30, 2001 to April 30,
|
| 1129 |
+
2021.
|
| 1130 |
+
|
| 1131 |
+
(c) Principles of Consolidation
|
| 1132 |
+
|
| 1133 |
+
The consolidated financial statements include Tidelands and its
|
| 1134 |
+
wholly-owned subsidiary. All intercompany accounts and transactions have been
|
| 1135 |
+
eliminated in consolidation.
|
| 1136 |
+
|
| 1137 |
+
(d) Oil, Natural gas and Other Mineral Properties
|
| 1138 |
+
|
| 1139 |
+
At the time Tidelands was established, no determinable market value was
|
| 1140 |
+
available for the assets transferred to Tidelands; consequently, nominal values
|
| 1141 |
+
were assigned. Accordingly, no allowance for depletion has been computed.
|
| 1142 |
+
|
| 1143 |
+
|
| 1144 |
+
|
| 1145 |
+
19
|
| 1146 |
+
<PAGE>
|
| 1147 |
+
|
| 1148 |
+
|
| 1149 |
+
TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
|
| 1150 |
+
|
| 1151 |
+
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
|
| 1152 |
+
|
| 1153 |
+
|
| 1154 |
+
Tidelands' revenues are derived from production payments and overriding
|
| 1155 |
+
royalty interests related to properties located in the Gulf of Mexico.
|
| 1156 |
+
|
| 1157 |
+
Net revenues from oil and natural gas royalties related to proved
|
| 1158 |
+
developed oil and natural gas reserves were $1,166,210, $1,579,911 and
|
| 1159 |
+
$1,108,019 in 2001, 2000, and 1999, respectively.
|
| 1160 |
+
|
| 1161 |
+
(e) Federal Income Taxes
|
| 1162 |
+
|
| 1163 |
+
No provision has been made for Federal income taxes on Tidelands'
|
| 1164 |
+
income since such taxes are the liability of the unitholders. Federal income
|
| 1165 |
+
taxes have been provided on the income of Tidelands Corporation, excluding the
|
| 1166 |
+
95% of oil and natural gas royalties to be distributed to Tidelands and after
|
| 1167 |
+
deducting statutory depletion.
|
| 1168 |
+
|
| 1169 |
+
(f) Credit Risk Concentration and Cash Equivalents
|
| 1170 |
+
|
| 1171 |
+
Financial instruments which potentially subject Tidelands and its
|
| 1172 |
+
wholly-owned subsidiary to concentrations of credit risk are primarily
|
| 1173 |
+
investments in cash equivalents and unsecured oil and natural gas royalties
|
| 1174 |
+
receivable. Tidelands and its wholly-owned subsidiary place their cash
|
| 1175 |
+
investments with financial institutions that management considers creditworthy
|
| 1176 |
+
and limit the amount of credit exposure from any one financial institution.
|
| 1177 |
+
Royalties receivable are from large creditworthy companies and Tidelands
|
| 1178 |
+
historically has not encountered collection problems. The estimated fair values
|
| 1179 |
+
of cash equivalents and oil and natural gas royalties receivable approximate the
|
| 1180 |
+
carrying values due to the short term nature of these financial instruments.
|
| 1181 |
+
|
| 1182 |
+
Cash equivalents of $998,213 and $1,007,057 at December 31, 2001 and
|
| 1183 |
+
2000, respectively, consist of cash held in a money market account that invests
|
| 1184 |
+
in U.S. Treasury securities. For purposes of the statements of cash flows,
|
| 1185 |
+
Tidelands considers all investments with original maturities of three months or
|
| 1186 |
+
less to be cash equivalents.
|
| 1187 |
+
|
| 1188 |
+
(g) Statements of Cash Flows
|
| 1189 |
+
|
| 1190 |
+
Tidelands Corporation paid $20,100, $27,488, and $9,011 in federal
|
| 1191 |
+
income taxes in 2001, 2000, and 1999, respectively. No payments of interest were
|
| 1192 |
+
made in 2001, 2000 and 1999.
|
| 1193 |
+
|
| 1194 |
+
(h) Use of Estimates
|
| 1195 |
+
|
| 1196 |
+
The preparation of financial statements in conformity with accounting
|
| 1197 |
+
principles generally accepted in the United States requires management to make
|
| 1198 |
+
estimates and assumptions that affect the reported amounts of assets and
|
| 1199 |
+
liabilities and disclosure of contingent assets and liabilities at the date of
|
| 1200 |
+
the financial statements and the reported amounts of revenues and expenses
|
| 1201 |
+
during the reporting period. Actual results could differ from those estimates.
|
| 1202 |
+
|
| 1203 |
+
(i) Net Income per Unit
|
| 1204 |
+
|
| 1205 |
+
Net income per unit is determined by dividing net income by the
|
| 1206 |
+
weighted average number of units of beneficial interest outstanding during the
|
| 1207 |
+
period.
|
| 1208 |
+
|
| 1209 |
+
|
| 1210 |
+
|
| 1211 |
+
20
|
| 1212 |
+
<PAGE>
|
| 1213 |
+
|
| 1214 |
+
TIDELANDS ROYALTY TRUST "B" AND SUBSIDIARY
|
| 1215 |
+
|
| 1216 |
+
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
|
| 1217 |
+
|
| 1218 |
+
|
| 1219 |
+
(j) Significant Royalty Sources
|
| 1220 |
+
|
| 1221 |
+
Royalty revenue received by Tidelands from producers is summarized as
|
| 1222 |
+
follows:
|
| 1223 |
+
|
| 1224 |
+
<Table>
|
| 1225 |
+
<Caption>
|
| 1226 |
+
2001 2000 1999
|
| 1227 |
+
------------- -------------- -------------
|
| 1228 |
+
|
| 1229 |
+
<S> <C> <C> <C>
|
| 1230 |
+
Devon Energy Production Company ....................... 68% 68% --
|
| 1231 |
+
Pennzenergy ........................................... -- 21% 81%
|
| 1232 |
+
Burlington Resources Oil and Natural gas Company ...... 12% 7% 6%
|
| 1233 |
+
Millenium Offshore Group .............................. 12% -- --
|
| 1234 |
+
Others ................................................ 8% 4% 13%
|
| 1235 |
+
---- ---- ----
|
| 1236 |
+
100% 100% 100%
|
| 1237 |
+
==== ==== ====
|
| 1238 |
+
</Table>
|
| 1239 |
+
|
| 1240 |
+
(2) UNDISTRIBUTED INCOME
|
| 1241 |
+
|
| 1242 |
+
Undistributed income includes $828,185 and $768,503 applicable to the
|
| 1243 |
+
subsidiary corporation at December 31, 2001 and 2000, respectively.
|
| 1244 |
+
|
| 1245 |
+
(3) OVERPAID ROYALTIES
|
| 1246 |
+
|
| 1247 |
+
Tidelands recorded a liability for possible royalty overpayments
|
| 1248 |
+
received in various years from 1988 through 1993, which is reflected in accounts
|
| 1249 |
+
payable in the accompanying consolidated balance sheets. During 2000 and 1999,
|
| 1250 |
+
Tidelands determined that $251,534 and $258,902, respectively, was no longer
|
| 1251 |
+
required to be reserved, because it was no longer probable that repayment of
|
| 1252 |
+
such amounts actually would be required. Accordingly, accounts payable was
|
| 1253 |
+
reduced and oil and natural gas royalty income was increased by such amounts for
|
| 1254 |
+
each respective year.
|
| 1255 |
+
|
| 1256 |
+
(4) SUPPLEMENTAL INFORMATION RELATING TO OIL AND NATURAL GAS RESERVES
|
| 1257 |
+
(UNAUDITED)
|
| 1258 |
+
|
| 1259 |
+
Oil and natural gas reserve information relating to Tidelands' royalty
|
| 1260 |
+
interests is not presented because such information is not available to
|
| 1261 |
+
Tidelands. Tidelands' share of oil and natural gas produced for its royalty
|
| 1262 |
+
interests was as follows: oil (barrels) - 10,625 in 2001, 12,497 in 2000 and
|
| 1263 |
+
12,810 in 1999; and natural gas (mcf) - 201,284 in 2001, 256,706 in 2000, and
|
| 1264 |
+
319,858 in 1999.
|
| 1265 |
+
|
| 1266 |
+
(5) SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)
|
| 1267 |
+
|
| 1268 |
+
The following quarterly financial information for the years ended
|
| 1269 |
+
December 31, 2001 and 2000 is unaudited; however, in the opinion of management,
|
| 1270 |
+
all adjustments necessary to present a fair statement of the results of
|
| 1271 |
+
operations for the interim periods have been included.
|
| 1272 |
+
|
| 1273 |
+
|
| 1274 |
+
|
| 1275 |
+
21
|
| 1276 |
+
<PAGE>
|
| 1277 |
+
|
| 1278 |
+
<Table>
|
| 1279 |
+
<Caption>
|
| 1280 |
+
OIL AND
|
| 1281 |
+
NATURAL GAS NET NET INCOME
|
| 1282 |
+
ROYALTIES INCOME PER UNIT
|
| 1283 |
+
------------ ------------ ------------
|
| 1284 |
+
|
| 1285 |
+
<S> <C> <C> <C>
|
| 1286 |
+
Quarter ended:
|
| 1287 |
+
March 31, 2001 .......................... $ 414,238 $ 382,398 $ .28
|
| 1288 |
+
June 30, 2001 ........................... 320,182 296,692 $ .21
|
| 1289 |
+
September 30, 2001 ...................... 244,820 237,452 $ .17
|
| 1290 |
+
December 31, 2001 ....................... 186,970 175,731 $ .13
|
| 1291 |
+
------------ ------------ ------------
|
| 1292 |
+
$ 1,166,210 $ 1,092,273 $ .79
|
| 1293 |
+
============ ============ ============
|
| 1294 |
+
|
| 1295 |
+
Quarter ended:
|
| 1296 |
+
March 31, 2000 .......................... $ 228,498 $ 216,758 $ .16
|
| 1297 |
+
June 30, 2000 ........................... 247,622 233,253 $ .17
|
| 1298 |
+
September 30, 2000 ...................... 633,667 617,334 $ .45
|
| 1299 |
+
December 31, 2000 ....................... 470,124 465,036 $ .34
|
| 1300 |
+
------------ ------------ ------------
|
| 1301 |
+
$ 1,579,911 $ 1,532,381 $ 1.11
|
| 1302 |
+
============ ============ ============
|
| 1303 |
+
</Table>
|
| 1304 |
+
|
| 1305 |
+
|
| 1306 |
+
|
| 1307 |
+
22
|
| 1308 |
+
<PAGE>
|
| 1309 |
+
|
| 1310 |
+
|
| 1311 |
+
SIGNATURES
|
| 1312 |
+
|
| 1313 |
+
Pursuant to the requirements of Section 13 or 15(d) of the Securities
|
| 1314 |
+
Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form
|
| 1315 |
+
10-K to be signed by the undersigned thereunto duly authorized.
|
| 1316 |
+
|
| 1317 |
+
TIDELANDS ROYALTY TRUST "B"
|
| 1318 |
+
(Registrant)
|
| 1319 |
+
|
| 1320 |
+
By: Bank of America, N.A.
|
| 1321 |
+
-------------------------------------
|
| 1322 |
+
(in its capacity as Corporate Trustee
|
| 1323 |
+
of Tidelands Royalty Trust "B" and not
|
| 1324 |
+
in its individual capacity or
|
| 1325 |
+
otherwise)
|
| 1326 |
+
|
| 1327 |
+
Date: March 27, 2002 By: /s/ CINDY STOVER MILLER
|
| 1328 |
+
-------------------------------------
|
| 1329 |
+
Cindy Stover Miller
|
| 1330 |
+
Vice President
|
| 1331 |
+
|
| 1332 |
+
Pursuant to the requirements of the Securities Exchange Act of 1934,
|
| 1333 |
+
this Annual Report on Form 10-K has been signed below by the following persons
|
| 1334 |
+
on behalf of the Registrant and in the capacities and on the dates indicated.
|
| 1335 |
+
|
| 1336 |
+
<Table>
|
| 1337 |
+
<Caption>
|
| 1338 |
+
NAME CAPACITIES DATE
|
| 1339 |
+
- ---- ---------- ----
|
| 1340 |
+
|
| 1341 |
+
<S> <C> <C>
|
| 1342 |
+
Bank of America, N.A. Corporate Trustee March 27, 2002
|
| 1343 |
+
|
| 1344 |
+
By: /s/ CINDY STOVER MILLER
|
| 1345 |
+
------------------------
|
| 1346 |
+
Cindy Stover Miller
|
| 1347 |
+
Vice President
|
| 1348 |
+
|
| 1349 |
+
|
| 1350 |
+
/s/ R. RAY BELL Principal Accounting Officer March 27, 2002
|
| 1351 |
+
- -----------------------
|
| 1352 |
+
R. Ray Bell
|
| 1353 |
+
</Table>
|
| 1354 |
+
|
| 1355 |
+
|
| 1356 |
+
|
| 1357 |
+
23
|
| 1358 |
+
<PAGE>
|
| 1359 |
+
EXHIBIT INDEX
|
| 1360 |
+
<Table>
|
| 1361 |
+
<Caption>
|
| 1362 |
+
Exhibit
|
| 1363 |
+
Number Description
|
| 1364 |
+
- ------ -----------
|
| 1365 |
+
|
| 1366 |
+
<S> <C>
|
| 1367 |
+
3.1 Indenture of Trust dated June 1, 1954, as amended, filed as an Exhibit to Tidelands' Quarterly Report on
|
| 1368 |
+
Form 10-Q for the period ended September 30, 2001, filed with the Securities and Exchange Commission on
|
| 1369 |
+
November 14, 2001, and incorporated herein by reference.
|
| 1370 |
+
|
| 1371 |
+
21.1 Subsidiaries of Tideland Royalty Trust "B"
|
| 1372 |
+
</Table>
|
| 1373 |
+
|
| 1374 |
+
|
| 1375 |
+
</TEXT>
|
| 1376 |
+
</DOCUMENT>
|
| 1377 |
+
<DOCUMENT>
|
| 1378 |
+
<TYPE>EX-21.1
|
| 1379 |
+
<SEQUENCE>3
|
| 1380 |
+
<FILENAME>d95431ex21-1.txt
|
| 1381 |
+
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
|
| 1382 |
+
<TEXT>
|
| 1383 |
+
<PAGE>
|
| 1384 |
+
|
| 1385 |
+
EXHIBIT 21.1
|
| 1386 |
+
|
| 1387 |
+
|
| 1388 |
+
|
| 1389 |
+
SUBSIDIARIES OF TIDELANDS
|
| 1390 |
+
|
| 1391 |
+
|
| 1392 |
+
1) Tidelands Royalty "B" Corporation
|
| 1393 |
+
|
| 1394 |
+
|
| 1395 |
+
|
| 1396 |
+
</TEXT>
|
| 1397 |
+
</DOCUMENT>
|
| 1398 |
+
</SEC-DOCUMENT>
|
| 1399 |
+
-----END PRIVACY-ENHANCED MESSAGE-----
|