-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NCUYtU1HZaRaZFFcXGiBJ5qsR0dmWRqhGNi86FZ4rLVS1eK0q6UprviNPsT0pTco aVGEPychA74deMGbVlJ+QQ== 0000950134-02-014411.txt : 20021114 0000950134-02-014411.hdr.sgml : 20021114 20021114145938 ACCESSION NUMBER: 0000950134-02-014411 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021114 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08677 FILM NUMBER: 02824628 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 10-Q 1 d01169e10vq.txt FORM 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2002 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 0-8565 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.) BANK OF AMERICA, N.A. 75283-0650 P.O. BOX 830650, DALLAS, TEXAS (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code (800) 985-0794 None (Former name, former address and former fiscal year if changed since last report) ------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate number of units of beneficial interest outstanding as of the latest practicable date. As of September 30, 2002, we had 1,386,375 units of beneficial interest outstanding. ================================================================================ TIDELANDS ROYALTY TRUST "B" INDEX
PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) ................................................................ 2 Consolidated Balance Sheets September 30, 2002 and December 31, 2001 .................................... 2 Condensed Consolidated Statements of Income and Undistributed Income for the Three Months and Nine Months Ended September 30, 2002 and 2001 ....................................................................... 3 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001 ............................................................................. 4 Notes to Condensed Consolidated Financial Statements .................................................... 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........... 6 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ...................................... 9 ITEM 4. CONTROLS AND PROCEDURES ......................................................................... 10 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ............................................................................... 11 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ................................................................ 11 Signatures .............................................................................................. 12
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS TIDELANDS ROYALTY TRUST B AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 (UNAUDITED)
ASSETS SEPTEMBER 30, DECEMBER 31, 2002 2001 ------------- ------------- Current Assets: Cash and cash equivalents ................................. $ 580,343 $1,165,980 Oil and gas royalties receivable .......................... 142,287 122,563 Federal income taxes receivable ........................... 11,432 10,520 Interest receivable ....................................... 13,335 -- ---------- ---------- Total current assets ................................... $ 747,397 $1,299,063 Investment in U.S. Treasury and agency bonds .................. 722,962 -- Oil, gas and other mineral properties ......................... 2 2 ---------- ---------- $1,470,361 $1,299,065 ========== ========== LIABILITIES AND TRUST EQUITY Current Liabilities: Accounts payable .......................................... $ 134,669 $ 131,584 Income distributable to unitholders ....................... 237,115 152,772 ---------- ---------- Total current liabilities .............................. $ 371,784 $ 284,356 ---------- ---------- Trust Equity: Corpus - authorized 1,386,525 units of beneficial interest, issued 1,386,375 at nominal value ........................ 2 2 Undistributed income ...................................... 1,098,575 1,014,707 ---------- ---------- Total trust equity ..................................... 1,098,577 1,014,709 ---------- ---------- $1,470,361 $1,299,065 ========== ==========
See accompanying notes to condensed consolidated financial statements. 2 TIDELANDS ROYALTY TRUST B AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND UNDISTRIBUTED INCOME FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, -------------------------- ------------------------- 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Income: Oil and gas royalties ................... $ 303,784 $ 244,820 $ 671,010 $ 979,240 Interest and other ...................... 8,444 10,217 18,202 38,982 ----------- ----------- ----------- ----------- 312,228 255,037 689,212 1,018,222 General and administrative expenses ......... 44,397 15,574 112,624 90,070 ----------- ----------- ----------- ----------- Income before Federal income taxes ...... 267,831 239,463 576,588 928,152 Federal income taxes of subsidiary .......... (1,250) 2,011 650 11,611 ----------- ----------- ----------- ----------- Net income .............................. 269,081 237,452 575,938 916,541 Undistributed income at beginning of period . 1,066,609 1,038,289 1,014,707 1,254,888 ----------- ----------- ----------- ----------- 1,335,690 1,275,741 1,590,645 2,171,429 Distributions to unitholders ................ 237,115 283,995 492,070 1,179,683 ----------- ----------- ----------- ----------- Undistributed income at end of period ....... $ 1,098,575 $ 991,746 $ 1,098,575 $ 991,746 =========== =========== =========== =========== Net income per unit ......................... $ 0.19 $ 0.17 $ 0.42 $ 0.66 =========== =========== =========== =========== Distributions per unit ...................... $ 0.17 $ 0.20 $ 0.35 $ 0.85 =========== =========== =========== ===========
See accompanying notes to condensed consolidated financial statements. 3 TIDELANDS ROYALTY TRUST B AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED)
2002 2001 ------------ ------------ Cash flows from operating activities: Net income ...................................................... $ 575,938 $ 916,541 Adjustments to reconcile net income to net cash provided by operating activities: Change in assets and liabilities: Oil and gas royalties receivable ............................. (19,724) 258,742 Federal income taxes receivable .............................. (912) (2,688) Interest receivable .......................................... (13,335) -- Accounts payable ............................................. 3,085 243 ------------ ------------ Net cash provided by operating activities ............... 545,052 1,172,838 Cash flows from investing activities - Investment in U.S. Treasury and agency bonds ................. (722,962) -- ------------ ------------ Cash flows from financing activities - Distributions to unitholders ................................. (407,727) (1,481,298) ------------ ------------ Net decrease in cash and cash equivalents .................... (585,637) (308,460) Cash and cash equivalents at beginning of period .................... 1,165,980 1,339,233 ------------ ------------ Cash and cash equivalents at end of period .......................... $ 580,343 $ 1,030,773 ============ ============
See accompanying notes to condensed consolidated financial statements. 4 TIDELANDS ROYALTY TRUST B AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2002 (UNAUDITED) ACCOUNTING POLICIES The financial statements include the financial statements of Tidelands Royalty Trust "B" ("Tidelands") and its wholly-owned subsidiary, are condensed, and should be read in conjunction with the annual report on Form 10-K for the fiscal year ended December 31, 2001. The financial statements included herein are unaudited, but in the opinion of management they include all adjustments necessary for a fair presentation of the results of operations for the periods indicated. Operating results for the three and nine months ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. As an overriding royalty owner, actual production results are not known to us until reported by the operator, which could be a period of 60-90 days later than the actual month of production. To comply with accounting principles generally accepted in the United States of America, we must estimate earned but unpaid royalties from this production. To estimate this amount, we utilize historical information based on the latest production reports from the individual leases and current average prices as reported for the period under report. DISTRIBUTABLE INCOME Tidelands' indenture provides that the corporate trustee is to distribute all cash in the trust, less an amount reserved for 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. Such payments are to be made within 15 days after the record date. As stated under "Accounting Policies" above, the financial statements in this Form 10-Q are the condensed and consolidated account balances of Tidelands and its wholly-owned subsidiary. However, distributable income is paid from the unconsolidated account balances of Tidelands. Distributable income is comprised of (i) royalties from offshore Texas leases owned directly by Tidelands, (ii) 95% of the overriding royalties received by the subsidiary that are paid to Tidelands on a quarterly basis, and (iii) less administrative expenses of Tidelands. UNDISTRIBUTED INCOME A contract between Tidelands and its subsidiary provides that 95% of the overriding royalties received are to be paid to Tidelands each quarter. The subsidiary retains the remaining 5% of the overriding royalties along with other items of income and expense, until such time as the Board of Directors declares a dividend out of the retained earnings. No such dividend has been paid since 1993. On September 30, 2002, undistributed income of Tidelands was $263,004 and the undistributed income of the subsidiary was $835,571. ACCOUNTS PAYABLE Tidelands' subsidiary, Tidelands Royalty "B" Corporation, has remaining accounts payable of $127,234 at September 30, 2002, to cover refunds that may be required for possible overpayments received on prior years' royalty payments. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION -- LIQUIDITY AND CAPITAL RESOURCES 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 overriding royalty interests in any oil, 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 Exploration, Inc. ("Elf"), and their respective 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 (excluding cash retained by its subsidiary), 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. Bank of America, N.A. serves as corporate trustee. The Indenture, and the charter and by-laws of Tidelands' wholly-owned subsidiary, prohibit the operation of any kind of trade or business. Since Tidelands' sole purpose is to collect and distribute cash collected from royalties, there are no requirements for capital. The unitholders of Tidelands have consented to extend the life of the Indenture to April 30, 2021. 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 well-head of the oil and natural gas subject to such lease until the sum of $1,500,000 has been paid under the lease. After $1,500,000 has been paid under a particular lease, Tidelands' interest in such lease will convert to an overriding royalty, and Tidelands will receive payments equal to approximately 4.17% (as adjusted based on the leasehold interest acquired) of the value of the oil and natural gas sold as long as the lease on such tract exists. Tidelands has seven assigned leases. At September 30, 2002, 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' present royalty interest on this lease is 12.5%. Since the Acquisition Expiration Date, Chevron and Elf 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 leases 6 acquired by Chevron, Elf or their assignees prior to the Acquisition Expiration Date. Those leases are listed in the following table.
LEASE AREA BLOCK NUMBER ACRES DECIMAL OPERATOR ---- ----- ------ ----- ------- -------- Galveston ...................... 303 4565 5,760 0.041662 Burlington Resources Offshore Inc. High Island .................... 128 5009 4,364 0.041662 Millennium Offshore Group Inc. Sabine Pass .................... 13 3959 3,438 0.041662 Devon Energy Production Company LP West Cameron ................... 165 758 5,000 0.041662 Devon Energy Production Company LP West Cameron ................... 225 900 3,750 0.010416 Dominion Exploration and Production Inc. West Cameron ................... 251 21544 2,500 0.125000 Chevron U.S.A., Inc. West Cameron ................... 291 4397 5,000 0.041662 Devon Energy Production Company LP ------ Total acres ................ 29,812 ------
The 1951 Contract provides that any assignment by Gulf (currently Chevron and Elf) of any leases acquired by it in the Royalty Area and any assignment of the information, data or records acquired under the 1951 Contract shall be made subject to the production payments and the overriding royalty interests provided therein. Devon Energy Production Company LP has filed a plan of development to drill five wells on West Cameron, Block 165. There is no guarantee that a well will ever be drilled on West Cameron, Block 165. There is also no guarantee that if a well is drilled it will be profitable. CRITICAL ACCOUNTING POLICIES As an overriding royalty owner, actual production results are not known to us until reported by the operator, which could be a period of 60-90 days later than the actual month of production. To comply with accounting principles generally accepted in the United States of America, we must estimate earned but unpaid royalties from this production. To estimate this amount, we utilize historical information based on the latest production reports from the individual leases and current average prices as reported for the period under report. GENERAL Tidelands realizes a majority of its revenue from the sale of natural gas, and these sales accounted for approximately 75% of revenue in the current nine month period. Revenue includes estimated royalties of oil and natural gas produced but not paid. Distributions fluctuate from quarter to quarter due to changes in oil and natural gas prices and production quantities. Net income is determined by the revenue from oil and natural gas produced and sold during the accounting period. Distributions, however, are determined by the cash available to Tidelands on the determination date. The following table presents the net production quantities of oil and natural gas and the net income and distributions per unit for the last five quarters.
PRODUCTION ---------------------------------- NET CASH QUARTER OIL (BBLS) NATURAL GAS (MCF) INCOME DISTRIBUTION ------- ---------- ----------------- ------ ------------ September 30, 2001 ......... 2,698 50,916 .17 .20 December 31, 2001 .......... 2,479 46,573 .13 .11 March 31, 2002 ............. 2,635 52,907 .12 .08 June 30, 2002 .............. 1,452 36,539 .10 .10 September 30, 2002 ......... 2,670 74,365 .19 .17
7 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 productive wells drilled and maintained on leases subject to Tidelands' interest, the level of production over time from such wells, and the prices at which the oil and natural gas from such wells is 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 and any statement using the word "expects" or "would" are forward-looking statements. 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 depletions or disruptions that result from storm damage, blowouts or other production accidents, and geological changes such as cratering of productive formations; and expiration or release of leases subject to Tidelands' interests. Important aspects of Tidelands' operations are conducted by third parties. These operations 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. RESULTS OF OPERATIONS -- THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 Net income increased 13% to $269,081 for the three month period ended September 30, 2002, from the $237,452 of net income realized in the comparable period a year ago. The average price realized for oil increased 11% in the current period from the average price realized during the same period a year ago. The average price realized for natural gas decreased 12% in the current period from the average price realized during the same period a year ago. Natural gas production was up 46% while oil production decreased 1% from the results of the comparable period a year ago. Revenues from oil royalties increased 10% during the current three month period from the comparable period a year ago. The volume of oil sold decreased 1%. The average price received for oil in the current period amounted to $26.81 as compared to $24.09 for the comparable period a year ago. Revenues from natural gas royalties were up 29% in the current period from the results of the corresponding period a year ago. The volume of natural gas sold increased 46%. The average price of natural gas decreased to $3.12 from $3.53 for the same period a year ago. The quantities of oil and natural gas sold and average prices realized from current operations for the three months ended September 30, 2002 and 2001, are presented in the following table.
2002 2001 ---------- ---------- OIL Barrels sold ................. 2,670 2,698 Average price ................ $ 26.81 $ 24.09 NATURAL GAS Mcf sold ..................... 74,365 50,916 Average price ................ $ 3.12 $ 3.53
8 RESULTS OF OPERATIONS -- NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 Net income decreased 37% to $575,938 for the nine month period ended September 30, 2002, from the $916,541 of net income realized in the comparable period a year ago. The average price realized for oil decreased 3% in the current period from the average price realized during the same period a year ago. The average price realized for natural gas decreased 38% in the current period from the average price realized during the same period a year ago. Natural gas production was up 6% while oil production decreased 17% from the results of the comparable period a year ago. Revenues from oil royalties decreased 20% during the current nine month period from the comparable period a year ago. The volume of oil sold decreased 17%. The average price received for oil in the current period amounted to $25.17 as compared to $25.98 for the comparable period a year ago. Revenues from natural gas royalties were down 35% in the current period from the results of the corresponding period a year ago. The volume of natural gas sold increased 6%. The average price of natural gas decreased to $3.06 from $4.96 for the same period a year ago. The quantities of oil and natural gas sold and average prices realized from current operations for the nine months ended September 30, 2002 and 2001, are presented in the following table:
2002 2001 ----------- ----------- OIL Barrels sold .................... 6,757 8,146 Average price ................... $ 25.17 $ 25.98 NATURAL GAS Mcf sold ........................ 163,811 154,711 Average price ................... $ 3.06 $ 4.96
FORWARD-LOOKING STATEMENTS The statements discussed in this quarterly report on Form 10-Q regarding our future financial performance and results, and other statements that are not historical facts, are forward-looking statements as defined in Section 27A of the Securities Act of 1933. We use the words "may," "will," "expect," "anticipate," "estimate," "believe," "continue," "intend," "plan," "budget," or other similar words to identify forward-looking statements. You should read statements that contain these words carefully because they discuss future expectations, contain projections of our financial condition, and/or state other "forward-looking" information. Events may occur in the future that we are unable to accurately predict, or over which we have no control. If one or more of these uncertainties materialize, or if underlying assumptions prove incorrect, actual outcomes may vary materially from those forward-looking statements included in this Form 10-Q. Extraordinary weather conditions in the Gulf of Mexico interrupted production and affected all offshore Gulf leases from late September until mid-October, which may decrease the Trust's revenue for the fourth quarter of 2002 and cash flow for the first quarter of 2003. The Trust is unable to predict the effect this extraordinary weather may have on production or on the Trusts' cash flow. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 9 ITEM 4. CONTROLS AND PROCEDURES Not applicable. 10 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On July 8, 2002, we filed suit against Chevron U.S.A. Inc. in the United States District Court for the Southern District of Texas, Houston Division. In April of 2001, Chevron executed an oil and gas lease in the Gulf of Mexico, off the shore of Louisiana. We had executed a contract with Chevron in 1951 that we believe entitles us to a $1,500,000 production payment from Chevron and a 1/24 overriding royalty interest in the lease. We have requested that Chevron fulfill its obligations under the 1951 contract including paying the $1,500,000 production payment and conveying to us a 1/24 overriding royalty interest in the lease. On November 1, 2002, Tidelands filed a motion for summary judgment, requesting the court to order Chevron to fulfill its obligations under the 1951 contract including paying the $1,500,000 production payment and conveying to us a 1/24 overriding royalty interest in the lease. Tidelands expects a ruling on this motion by the end of 2002. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are included herein: 99.1 Certification of the Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification of the Corporate Trustee pursuant to Section 906 of the Sarbanes-Oxley of Act of 2002.
(b) Current Reports on Form 8-K: Current report on Form 8-K dated and filed August 14, 2002, pursuant to Item 9. furnishing the certifications of the Trustee and the Principal Accounting Officer. 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TIDELANDS ROYALTY TRUST "B" Bank of America, N.A., Trustee November 14, 2002 By: /s/ RON E. HOOPER ---------------------------- Ron E. Hooper Senior Vice President November 14, 2002 By: /s/ R. RAY BELL ---------------------------- R. Ray Bell Principal Accounting Officer 12 CERTIFICATIONS I, R. Ray Bell, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Tidelands Royalty Trust "B"; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's Trustee and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's Trustee and I have disclosed, based on our most recent evaluation, to the registrant's auditors: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's Trustee and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. In giving the certifications in paragraphs 4, 5 and 6 above, I have relied to the extent I consider reasonable on information provided to me by various working interest owners. Date: November 14, 2002 /s/ R. Ray Bell ---------------------------- R. Ray Bell Principal Accounting Officer 13 CERTIFICATIONS I, Ron E. Hooper, certify that 1. I have reviewed this quarterly report on Form 10-Q of Tidelands Royalty Trust "B" for which Bank of America, N.A. acts as Trustee; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. In giving the certifications in paragraphs 4, 5 and 6 above, I have relied to the extent I consider reasonable on information provided to me by various working interest owners. Date: November 14, 2002 /s/ RON E. HOOPER ---------------------------------- Ron E. Hooper Senior Vice President Royalty Management on behalf of Bank of America Private Bank, not in its individual capacity Tidelands Royalty Trust "B" 14 TIDELANDS ROYALTY TRUST "B" C/O BANK OF AMERICA, N.A. P.O. BOX 830650 DALLAS, TEXAS 75283-0650 15 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ------- ----------- 99.1 Certification of the Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification of the Corporate Trustee pursuant to Section 906 of the Sarbanes-Oxley of Act of 2002.
EX-99.1 3 d01169exv99w1.txt CERTIFICATION OF THE PRINCIPAL ACCOUNTING OFFICER Exhibit 99.1 CERTIFICATION I, R. Ray Bell, Principal Accounting Officer of Tidelands Royalty Trust "B", certify that: 1. I have reviewed this quarterly report on Form 10-Q of Tidelands Royalty Trust "B"; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: November 14, 2002 /s/ R. RAY BELL ----------------------------- R. Ray Bell Principal Accounting Officer EX-99.2 4 d01169exv99w2.txt CERTIFICATION OF THE CORPORATE TRUSTEE Exhibit 99.2 CERTIFICATION I, Ron E. Hooper, Senior Vice President Royalty Management, on behalf of Bank of America Private Bank, not in its individual capacity but solely as the trustee of Tidelands Royalty Trust "B", certify that: 1. I have reviewed this quarterly report on Form 10-Q of Tidelands Royalty Trust "B"; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: November 14, 2002 /s/ RON E. HOOPER ------------------------------------------------------ Ron E. Hooper Senior Vice President Royalty Management on behalf of Bank of America Private Bank, not in its individual capacity but solely as the trustee of Tidelands Royalty Trust "B" -----END PRIVACY-ENHANCED MESSAGE-----